Introduction
Central Depositories Services India Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) are government-registered share depositories in India. National Securities Depository Ltd. (NSDL) is the depository of the National Stock Exchange (NSE) and Central Depositories Services India Ltd. (CDSL) is the depository of Bombay Stock Exchange (BSE). National Securities Depository Ltd. (NSDL) was founded in 1996. The Central Depository Services Limited CDSL was founded in 1999. NSDL and CDSL offer depository services to issuers, investors, and intermediaries. We will discuss this in the brief below paragraph.
What is National Securities Depository Ltd. (NSDL)?
National Securities Depository Ltd. (NSDL) provides depository services to investors who buy and sell shares. This depository services convert physical securities into electronic form and dematerialization converting electronic securities into physical form. Security exchange Board of India (SEBI) regulates CDSL & NSDL. NSDL is the depository of national stock exchange.
NSDL provides depository services for keeping stocks, bonds, debentures, and commercial papers in electronic format and facilitating trade and settlement of orders.
What is Central Depository Services Limited CDSL?
Central Depository Services Limited CDSL was founded in 1999 and is the depository of the Bombay Stock Exchange (BSE). This depository provides services of keeping and converting shares in electronic and physical form and is regulated by SEBI.
Differences between NSDL & CDSL.
Meaning:- NSDL is the depository of the National Stock Exchange and CDSL is the depository of the Bombay Stock Exchange. NSDL and CDSL provide depository services to issuers and investors and it helps investors keep securities in electronic form and also provide services to convert shares in physical form.
Establishment year:- Central Depository Services Limited CDSL was founded in 1999. The Central Depository Services Limited CDSL was founded in 1999.
Major Shareholder:- NSDL’s major shareholders are the National Stock Exchange, IDBI bank, Unit Trust of India, State Bank Of India, HDFC bank among others and CDSL’s major shareholders are BSE, Bank of India, State Bank of India, HDFC.
Demat account Format:- There is a difference between NSDL and CDSL demat account number format. In CDSL there is 16 digit number and in NSDL there are 14 numeric digits and 2 alpha ‘IN’.
Investors Accounts:- NSDL:- The National Securities Depository Limited (NSDL) is the larger depository in terms of investor accounts. NSDL has a market share, with over 2.2 crores (22 million) of investor accounts. As of the latest available data, CDSL has over 1.5 crores (15 million) of investor accounts. The Central Depository Services Limited (CDSL) has also witnessed significant growth in investor accounts over the years.
How do depositories work.
The demat account is just an intermediary and it is actually CDSL and NSDL which hold your shares. Investors’s shares are held by depositories that is NSDL and CDSL. When any person buys and sell shares that is held by depositories and Demat is only intermediary between investors and depositories.
If any person buy and sell share from NSE so share will be credited and debited through the demat account which is held by NSDL and if any person buy and sell share from BSE through demat account which is held by BSE.
Demat account is a platform that helps investors for buying and selling shares but NSDL and CDSL depositories where shares are kept in form electronic and physical form.
Conclusion
CDSL and NSDL are important parts of the investing journey for any investor without CDSL and NSDL no one can’t hold shares so it is a depository where investors keep shares in electronic form and physical form. A Demat account is only an intermediary that helps investors buy and sell shares through NSDL and CDSL.