What is the Full Form of NSDL

Aug 22, 2022, 16:45 IST

Full Form of NSDL

NSDL Stands for National Securities Depository Limited. NSDL is nothing however it is India’s securities depository. It's responsible for holding investors’ securities like shares and bonds in an electronic format. It had been established to change paper-based securities settlements, and now, it's the largest securities depository. Some of the principal shareholders of NSDL which include SBI, Axis Bank, HDFC Bank, Citi Bank, etc.

History of NSDL

In the year 1996, it was first established and NSDL became the first central securities depository in India. It had been set up after the Depositories Act, 1996. NSDL was the brainchild of the famous National Economic Group. The main plan behind setting up this central depository was to resolve problems which arise from ownership of physically held securities and their transfer. Once completing the formal inauguration of NSDL in 1996 in Mumbai, its state-of-the-art infrastructure made it the biggest depository in the world. Owing to its simplicity and stakeholder benefits, NSDL has been emerged as a popular financial institution in India.

After dematerializing securities, they're held in accounts like funds, and their transfer simply takes place through account transfers. DEMAT accounts were introduced in India through NSDL, and in less than 8 years of its existence, it enabled the implementation of T+2 accounts. As of 2021, NSDL has more than 2.28 Crore Demat accounts.

Benefits of NSDL

NSDL has a variety of advantages, and listing them would take a lot of time. We’ve listed some essential advantages below.

1. When using a depository platform like NSDL, one doesn't have to worry about wrong deliveries because the quality of the assets to be purchased is assured.

2. The depository system will exempt one from stamp duty as that is not required for equity shares, mutual funds, and debt instruments.

3. The use of paper is totally eliminated through the NSDL platform’s online solutions. This prevents the chance of theft, destruction, or mutilation of documents.

4. The traditional transfer of ownership was quite time-consuming because the method would take easily around 4 months. Through the depository, this will be eliminated, and securities are transferred quick and safely.

5. Avoiding offline records isn't only environmentally friendly because of paper being dematerialised however also can avoid its destruction due to long-term weather conditions when stored.

6. Through an online depository, it's quicker to update status reports regarding transactions or information regarding the purchase or sale of the security.

Services by NSDL

NSDL offers a wide variety of services, which includes essential services, value-added services, and even e-services. These services are available for stakeholders, including investors, banks, and others who only participate in the financial market of India. We’ve listed some services below.

1. Maintenance of accounts.

2. Dematerialisation and Rematerialisation.

3. Lending of stocks

4. Trade settlement services

5. Online NSDL services which includes internet-based Demat account statement, SPICE, Submissions of instructions through mobile phone, etc.