CDSL
- ECONOMY
News: What is CDSL, India’s registered share depository?
What's
in the news?
● Certain services at CDSL were disrupted due to a suspected cyber-attack over the weekend, media reports said. The problem had been fixed by November 20 evening, the reports said.
CDSL:
●
CDSL, or Central Depositories Services
India Ltd, is a Government-Registered
Share Depository, alongside its other state-owned counterpart National
Securities Depository Ltd (NSDL).
●
CDSL was founded in 1999.
● It is India's second-largest securities depository and allows for account transfers.
Promoters:
●
The State Bank of India (SBI), HDFC Bank,
Bank of Baroda, Bank of India, Standard Chartered Bank, and the Bombay Stock
Exchange are among the Indian banks and financial institutions promoting it.
● It is a Market Infrastructure Institution or MII that is deemed as a crucial part of the capital market structure, providing services to all market participants, including exchanges, clearing corporations, depository participants, issuers and investors.
Objective:
● CDSL describes its foundational goal as “convenient, dependable and secured depository services”.
Features:
●
It, like NSDL, offers all services,
including electronic custody of financial assets, as well as trade facilitation
and order settlement.
● This central depository, like NSDL, holds all types of stocks and securities.
What
is a Depository?
●
A depository is similar to a bank, except
that the deposits are electronic
securities (such as shares, debentures, bonds, government securities, units,
and so on).
●
It maintains funds for depositors and
banks and depositories have numerous commonalities.
●
Depositories hold securities in an
account, while the bank holds funds in an account.
● While a bank moves money between accounts on the account holder's request, a Depository transfers securities between accounts on the account holder's request.
Depositories
in India:
There are two
Depositories in India
●
National Securities Depository Limited
(NSDL)
● Central Depository Services India limited
Services:
Depositories offer the
following services.
●
Maintenance of Demat accounts.
●
Dematerialization and dematerialization.
●
Trade settlement.
●
Liquidity to markets.
●
Share transfers.
●
Market and off-market transfers.
●
Eliminate the risk of holding a physical
asset.
●
Provide safekeeping.
●
Nomination/transmission.