NSDL stands for National Securities Depository Limited. It is a company solely owned by the Government of India and it is one of the member companies of NSE. This article will talk about its roots, what it does, how to do business with them and more.
The National Securities Depository Limited or simply NSDL was set up in 1997 under the Ministry for Corporate Affairs. It has been promoted by Central Depositories Services Limited (CDSL) who remains its technical advisor as well as management consultant till date.
What is NSDL?
As an organization, NSDL was establish to provide depository and other securities related services to its members. The primary aim of NSDL is to enable members of NSE and BSE to keep their securities in safe custody with a central depository service provider, who will also provide them with electronic data interchange services.
Its main functions being:
- Maintain the register of holdings and transfers pertaining to securities in which the members are interested.
- To receive instructions relating to these transactions from the members through appropriate transmission systems/mechanisms/interfaces at their own premises or through data entry operators appointed by it from time to time, on their behalf.
- To process the instructions and transmit the data through such a transmission system/mechanism/interface to the appropriate depository bank.
How does it work?
NSDL provides its services by maintaining a register of holdings and transfers, and by providing depository services through depository banks as per the instructions given by its members. NSDL does not concern with the contents of the transactions entered in the register or with keeping any records of those transactions. The underlying securities are held physically on behalf of their members in safety deposit vaults at various locations across India.
NSDL has tie-ups with banks all over India, who act as depository banks. These banks however do not have any right to hold securities in their physical custody on behalf of NSDL except during settlement period (normally 2 days once a fortnight) and this too only during trading hours. Members of NSE can deposit/withdraw their securities to/from NSDL by depositing/withdrawing in their own respective accounts with the banks which act as depository banks.
The Depository Bank, upon receipt of instructions from the depository bank, will transfer the securities from the physical custody of the bank to safe custody at NSDL. These instructions are routed through appropriate transmission mechanism and interface systems to NSDL or other uphold providers of data interchange services, for onward transmission and processing.
NSDL has also tied-up with various clearing and settlement systems in India such as BSE Settlement Co., National Securities Clearing Corporation Limited (NSCC) for settlement.
Why is PAN Important?
NSDL provides depository services to NSE, BSE and various equity exchange traded funds and mutual funds.
During a transaction, the persons to get involve are:
- The person who is buying or selling securities
- Person who is selling securities for e.g. sells shares in a company to Employee Stock Option Scheme Account holders
- The person who is buying securities from above
Documents required for a new Pan?
The documents required for PAN are:
- Your SBN (Saving Bank Number)
- The account number in which the amount to be deposit from the Depository Bank
- After entering your PAN details, there will be a confirmation. You can then click on Proceed to confirm and submit the application. The system will send your application to the bank. You will get a confirmation message in your mail, indicating that IPS has been sent and it is being processed by the bank.
Documents required for old Pan?
Documents required for old PAN are:
2) Account number
3) Date of birth
What happens if the PAN card does not deliver?
Unfortunately, the PAN card has not get deliver to you. You can’t apply for a new PAN until your application is in and your PAN is under activation by the bank. Your profile will be updated on NSE and BSE to reflect that your PAN card has been rejected.
If you have already registered, then you don’t need to apply for a new PAN as your earlier one can still work until it expires next year.