A depository is an electronic facility where we can deposit shares, mutual funds, ETFs, bonds, government instruments etc. in electronic forms. It helps
To deposit the shares, bonds, government securities in electronic form.
To deposit post office savings, mutual fund units, other financial instruments in deposit form.
It reduces time to transfer the stocks, mutual fund units, bonds etc. and reduces the probability of error significantly.
It helps to transfer the shares from the company’s depository to each shareholder’s depository at the time of IPO and FPO.
It automates the whole share, mutual funds, bonds transactions process and reduces the human error.
To maintain the user uniqueness using the permanent account number or other important user details.
In India, National Securities Depository Ltd. (NSDL) acts as the depository for the equity market and takes care of all the share, mutual fund, bond related settlements between the buyers and the sellers.