Difference Between NSDL and CDSL

What is CDSL?

CDSL's demat services are extended through its agents called Depository Participants(DP). The DP is the link between the investor and CDSL. An investor who opens a demat account with a DP can utilise the services offered by CDSL. While the DP processes the instructions of the investor , the account and records thereof is maintained with CDSL. A DP is thus a "Point of Service" for the investor.

DSL is a depository that holds securities in dematerialized form and facilitates trading and settlement of securities to be processed by book entry. It is the second largest central depository of securities in India, based in Mumbai, Maharashtra. The depository began its operations in February 1999. It is promoted by Bombay Stock Exchange in association with prominent banks of the nation, i.e. State Bank of India, Union Bank of India, Bank of Baroda, Bank of India, Standard Chartered Bank.

Securities available for demat includes equity, debentures, bonds, commercial papers, government securities, certificate of deposit, mutual funds and so on. The total number of client accounts in CDSL is over 1.06 crores as on Feb 2016. There are 581 depository participants and 161 branches.

What is NSDL?

NSDL is the primary electronic depository of securities in India, that came into existence in the year 1996, based in Mumbai, Maharashtra. The promotion of NSDL is done by the country’s largest banks and institutions, i.e. IDBI, UTI and Bombay Stock Exchange. Further, India’s leading banks hold a stake in NSDL.

There are more than 1.4 crore active investor’s accounts and above nine lacs accounts having debt instruments in NSDL. There are around 26000 service centres covering 1900 (approx) cities. Demat custody includes shares, debenture, bonds, commercial papers and so on.

Basic services provided by NSDL include account maintenance, settlement of trade, dematerialization, rematerialization. It also facilitates off-market transfers and inter-depository transfers, pledge and hypothecation of securities, stock lending and so on.

Key Differences Between NSDL and CDSL

1.  NSDL is the pioneer electronic depository of securities, established in India. On the other hand, CDSL is the second central depository of securities which facilitates book entry transfer of securities.

2. When it comes to promotion, NSDL is promoted by India’s apex institutions like IDBI (Industrial Development Bank of India), UTI (Unit Trust of  India) and NSE (National Stock Exchange) whereas CDSL is promoted by Bombay Stock Exchange in association with Bank of Baroda, State Bank  of India, Housing Development Finance Corporation, Union Bank of India, Standard Chartered Bank.

3. NSDL operates in the NSE. Conversely, CDSL operates in BSE.

4. Account wise, the active investor accounts in NSDL are comparatively higher than in CDSL.

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RAVI GARG (CS)     

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