What is NSDL service?
The background of NSDL
Securities can be explained as financial assets that can be traded. This means that securities can both be bought and sold on the financial market. These are actually financial instruments that will include equity, fixed income instruments, common stocks, equity warrants and others. The two kinds of security documents include debts and equities. Debt instruments like bank notes, debentures and bonds are similar to money that has been borrowed and therefore have to be repaid. On the other hand, stocks and shares provide the buyers with partial ownership in a given company.
About National Security Depository Limited (NSDL)
NSDL is in fact the largest and the first ever depository in India that was created on November 8, 1996. The sole purpose of establishing this organization is to manage the securities held in the Indian Capital Market in a dematerialized form. On an average, NSDL opens about 3602 accounts in a day. NSDL has been promoted by the Industrial Development Bank of India (IDBI), National Stock Exchange (NSE) and Unit Trust of India (UTI). The important shareholders of the NSDL include the following entities.
- State Bank of India (SBI)
- HDFC Bank
- Dena Bank
- Canara Bank
- Oriental Bank of Commerce
NSDL was founded in order to address the issues that arise due to the physical holding of the ownership of securities and the conventional method of transferring them physically through paper work. Some of the overwhelming benefits of NSDL include mitigation of bad deliveries, ruling out of the risks connected to physical certificates, elimination of