What is Depository and what is the function of Depository

What is Depository and what is the function of Depository? What Do You Mean By Depository | What Is Depository In Demat Account |What is Depository and what is the function of Depository

Friends, today we are telling you about Depository , what is a depository and what are its functions. We are telling you all the important things about what is the function of depository in share market and why demat account is opened in the depository. You have to open a demat account to avail depository benefits.

Table of Contents

What is a Depository?

Depository works like a bank in the stock market, as we all know that you keep all your money in banks and the bank provides you complete information about your account, you can put money whenever you want, you can withdraw the same. like the stock market purchase of shares from -frokht would work with the responsibility of keeping her account depository investors for its DepositoryYou have to open an account which is called Demat account

. In this account, the depository keeps the complete information of the shareholder. The depository keeps the financial securities de-materialized in a form. The depository provides all the bank details of the investors to the company.

Depository
what is the function of Depository?

demat account

Demat account is an account in which the shares purchased by you are deposited, along with mutual funds , debentures, units and securities are also in this account Demat account works like a bank account in which you do not have your money but a company When you want to sell the shares of a company, it is transferred to the account of another investor from here

, just as you transfer money from a bank account. Earlier this process was very difficult, earlier when you used to buy shares, the company would give you its documents and when you had to sell the shares, all the documents had to be deposited in the company and this process used to take a lot of time but since the depository had The process of demat account has been started, this work has become very easy.

demat account
What is Depository and what is the function of Depository

Documents required to open a demat account

To open a demat account, you need some important documents which are as follows.

  • Aadhar card 
  • pan card 
  • bank account passbook 
  • 3 passport size photos

What does a Depository do?

  • If you want to buy shares for the first time in the stock market, then for this your demat account is opened only by the depository.
  • When your demat account is opened, the depository does the work of trading your shares through the demat account, all this process is done under electronic transaction.
  • When your demat account is opened, you become a depository member today, then the depository keeps complete record of your shares and debt security with them.
  • The responsibility of maintaining ownership records and trading of shares rests with the depository.
  • At present two depositories named NSDL and CDSL are functioning in the country.
What is Depository and what is the function of Depository

How many depositories are working in the country

At present, two depositories are working in the country at present, whose names are NSDL and CDSL, about which we are telling you in detail.

1- NSDL 

Considered to be India’s oldest and trusted depository, it was started in November 1996, whose full name is National Securities Depositories Ltd.

2- CDSL

 This is the second depository of India, which is related to BSE i.e. Mumbai Stock Exchange, it was started in February 1999, its full name is Central Depositories Services Ltd.

What is Depository and what is the function of Depository

So friends, this is the country’s two largest depository company, when you open your account in the depository, then that account is called demat account, our broker decides in which depository he opens your account

What is Depository and what is the function of Depository?

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