DEPOSITORY SYSTEM

 Meaning
 Central location for keeping securities

Book entry

Fully automated
Transfer of ownership Immobilization of shares

Providing withdrawal of securities
Distribution of dividend Redemption of shares

OBJECTIVES OF DEPOSITORY Reduce the time for transfer Avoid the risk of settlement Enhance liquidity and efficiency Reduce cost of transaction Create a system for central holding Promote the country’s competitiveness .

back office activities  Increase volume of trade . foreign investors . distribution of dividend  Less cost of transfer Benefits to companies  Details about the beneficial owner  Easy to transfer bonus .BENEFITS OF DEPOSITORY SYSTEM  Benefits to investors  Eliminating paper work. minimum risk  Quick settlement. notice and annual report Benefits to capital market  Transparent .

TWO DEPOSITORIES IN INDIA National securities depository ltd (NSDL)  Promoters of (NSDL)  Shareholders of (NSDL) Central depository services ltd(CDSL)  Promoters of (CDSL)  Share holders of (CDSL) .

CUSTODIAN An intermediary Provides ancillary services Claims benefits on behalf of clients Charges 1% of the total volume of transaction They are clearing members not trading They are registered under SEBI .

FINANCIAL INCLUSION  Why financial inclusion  To take the law income group to general flow  High transaction cost of borrower  High transaction cost of savers  In appropriate products  Different types financial services  Savings  Credit  Insurance  Renitence facilities .

MEASURES FOR PROMOTING FINANCIAL INCLUSION Extending a combination of banking products Providing financial literacy Adopting branchless banking also No frill account KYC norms simplified SHG groups .

Sign up to vote on this title
UsefulNot useful