A TRAINING REPORT ON

Customer Satisfaction on Depository Services with

Special Reference to Karvy

Submitted to:
Satyug Darshan Institute of Engineering and Technology

By:

AMARDEEP SINGH
Roll No.
Batch 2015 – 2018

In Partial Fulfillment of

Bachelor of Business Administration

(Industry-Integrated)
(Specialization: Financial Services and Banking)

MAHARSHI DAYANAND UNIVERSITY

ROHTAK (HARYANA)
(April, 2017)

Satyug Darshan Institute of Engineering and Technology

Bhupani Lalpur Road, Village Bhupani
Faridabad - 121002, NCR, Haryana, India
 TABLE OF CONTENTS

S. NO PARTICULARS PAGE NO.

INTRODUCTION
1.

PROFILE OF THE COMPANY

2.

DEPOSITORY
3.
RESEARCH METHODOLOGY
 Objective
 Scope
4.
 Method Of Data Collection
 Limitation Of Study

5. DATA ANALYSIS& INTERPRETATIONS

6. FINDINGS

CONCLUSION AND RECOMMENDATIONS

7.
8. APPENDICES
 DECLARATION

I, Mr. Amardeep Singh, student of Satyug Darshan Institute of Engineering &

Technology hereby declare that this training report titled “Customer Satisfaction on
Depository Services with Special Reference to KARVY” is the record of authentic
work carried out by me during the period from 02.01.2017 to 25.04.2017 and has not
been submitted to any other University or Institute for the award of any degree / diploma
etc.

(Signature)
Amardeep Singh

Date: 25.04.2017
COMPANY CERTIFICATE
 BONAFIDE CERTIFICATE

This is to certify that Mr. Amardeep Singh, student of Satyug Darshan Institute of
Engineering and Technology has successfully completed the project work titled
“Customer Satisfaction on Depository Services with Special Reference to
KARVY” in partial fulfillment of requirement for the completion of Bachelor in
Business Administration (BBA-IIFSB) course as prescribed by the Maharshi
Dayanand University, Rohtak, (HARYANA).

This project report is the record of authentic work carried out by him during the period
from 02.01.2017 to 25.04.2017. He has worked under my guidance.

(Signature)
(Mr. Paramjeet Singh Ahuja)
Assistant Professor, BBA Department
Project Guide (Internal)
Date:

Counter signed by

(Signature)
Mr. Ravi Bakshi
Department Coordinator (BBA Department)
Date:
 ACKNOWLEDGEMENT

It is a matter of great pleasure for me in submitting the project report on Customer

Satisfaction on Depository Services with Special Reference to KARVY for the
fulfillment of the requirement of my course.

I am thankful to and owe a deep gratitude to all those who helped me in preparing this
report. Words seem to be inadequate to express my sincere thanks to
Mr. Paramjeet Singh Ahuja for his valuable guidance, constructive criticism, untiring
efforts and immense encouragement during the entire course of the study due to which
my efforts have been rewarded.

Also not to be forgotten are the Lecturers of BBA Department who contributed their
ideas and suggestion.

(Signature)
Amardeep Singh
 CHAPTER – 1
INTRODUCTION
 INTRODUCTION

India has two hundred years old tradition in Securities. Infect that first India stock exchange established
in Bombay is the oldest in Asia. The earliest security dealings were Transactions in loan securities of
East India Company, the dominant institution of those days. Corporate Shares came into the picture by
1830’s and assumed significance with the Companies Act of 1956.

In 1887 the broker community gave birth to the “Native share and stock brokers Association” which is
now known as the Bombay Stock Exchange.

The Indian Capital grew at a very moderate rate from 1951 to 1980. However it registered an
impressive growth in 1980s. The process of liberalization and the transparency in operation has raised
the interest of foreign investors in India. Till 1978 there were only 8 recognized exchanges in India.
Initially the exchange operated on an outcry system i.e. manual system of trading Due to increase in the
trading volumes, the number of issuer increased substantially, and the birth of NSES highly transparent
automated system come into existence Even then there was an increase in paper work causing a
gridlock at every stage in the stock market This delays the clearance and settlement of traders,
registration of securities in the shareholder name and due this it increased the back office paper work
intermediaries These outdated systems have increased settlement risks and have rendered the
implementation of a delivery of a versus payment system impossible.

National Stock Exchange of India Limited to provide electronic depository facilities for securities
traded in the equity and the debt market. NSDL commenced its operations in the year 1996 and is the
first depository in India.
 CHAPTER – 2
Profile of the Company
 INTRODUCTION

Dematerialization or "Demat" is a process whereby your securities like shares, debentures etc, are
converted into electronic data and stored in computers by a Depository. Securities registered in your
name are surrendered to depository participant (DP) and these are sent to the respective companies who
will cancel them after "Dematerialization" and credit your depository account with the DP. The
securities on Dematerialization appear as balances in your depository account. These balances are
transferable like physical shares. If at a later date, you wish to have these "Demat" securities converted
back into paper certificates, the Depose Depository functions like a securities bank, where the
dematerialized physical securities are traded and held in custody. This facilitates faster, risk free and
low cost settlement.

In order to dematerialize certificates; an investor will have to first open an account with a DP & then
request for the dematerialization of certificate by filling up a dematerialization request form (DRF),
which is available with DP & submitting the same along with the physical certificates. The investor has
to ensure that before the certificate are handled over to the DP For demat, they are defaced by marking
“Surrendered for dematerialization” on the face of the certificates. Depository is much like a bank
and perform many activities that are similar to a bank.

Just as one opens a bank account in order to avail of the services of a bank, an investor opens a
depository account with a depository participant in order to avail of depository facilities.

Following table compares the two.

Bank Depository
Holds funds in accounts Holds securities in account
Transfers funds between accounts Transfers securities between accounts
Transfers without handling money Transfers without handling securities
Safekeeping of money Safekeeping of securities
Transacting the depository way has several advantages over the traditional system of transacting using
share certificates. Some of the benefits are:

 Trading in demat segment completely eliminates the risk of bad deliveries, which in turn
eliminates all cost and wastage of time associated with follow up for rectification. This
reduction in risk associated with bad delivery has lead to reduction in brokerage to the extent of
0.5% by quite a few brokerage firms.
 In case of transfer of electronic shares, you save 0.5% in stamp duty.
 You also avoid the cost of courier/ notarization/ the need for further follow-up with your broker
for shares returned for company objection
 In case the certificates are lost in transit or when the share certificates become mutilated or
misplaced, to obtain duplicate certificates, you may have to spend at least Rs500 for indemnity
bond, newspaper advertisement etc, which can be completely eliminated in the demat form.
 You can also receive your bonuses and rights into your depository account as a direct credit,
thus eliminating risk of loss in transit.
 You can also expect a lower interest charge for loans taken against demat shares as compared to
the interest for loan against physical shares. This could result in a saving of about 0.25% to
1.5%. Some banks have already announced this.
 RBI has increased the limit of loans against dematerialized securities as collateral to Rs2mn per
borrower as against Rs1mn per borrower in case of loans against physical securities.
 RBI has also reduced the minimum margin to 25% for loans against dematerialized securities as
against 50% for loans against physical securities.

In short the advantages of opening a demat account are

 Shorter settlements thereby enhancing liquidity

 No stamp duties on transfer of securities held in demat form.
 Elimination of risk associated with physical certificated such as bad delivery, fake
securities.
 Reduction in handling large volume of paper;
 Nomination facility
 Transmission of securities (such as shares, debentures, bonds and units) is done by DP
eliminating the need to correspond with each company separately.
  Change of name, address, dividend mandate, registration of power of attorney, transmission
etc. can be effected across companies held in demat form by a single instruction to the DP

Though under the Depositories Act, 1996, there is no compulsion and the investor can hold shares
either in physical or in dematerialized form. But according to Sebi’s directive certain shares have to be
traded compulsorily in dematerialized form where the seller cannot sell in physical form. However,
after he has bought the shares the investor can ask for dematerialization of the shares.

The Depository Account must be opened with a Depository Participant. NSDL interfaces with investor
trough Depository Participants (DPS). A list of names and addresses of all Authorized DP’s is available
with the NSDL and CDSL and one can meet any of these DP’s place and make a choice at your based
on your comfort and convenience. Opening a depository account is as simple as opening a bank
account. One can open a depository account with any DP.

To open a Depository Account, you have to submit the duly filled in Account Opening form along with
the following documents:

 Fill up the account opening form, which is available with the DP.
 Residential Proof - Copy of Ration Card, Passport, Driving License, Telephone Bill, Electricity
Bill or Rental Agreement.
 Sign the DP-client agreement, which defines the rights and duties of the DP and the person
wishing to open the account.
 Receive your client account number (client ID).
 This client ID along with your DP ID gives you a unique identification in the depository
system.

There is no restriction on the number of depository accounts a person can open. However, if your
existing physical shares are in joint names, you have to open the account in the same order of names
before you submit your share certificates for demat. A sole holder of the share certificates cannot add
more names as joint holders at the time of dematerializing his share certificates.

However, if the investor wants to transfer the ownership from his individual name to a joint name, he
should first open an account as the sole holder (account A) and dematerialize the share certificates. He
should then open another depository account (account B) in which he is the first holder and the other
person is the second holder and make an off market transfer of the shares from the account A to
account B. The investor will incur a charge on this transaction. Alternatively, the certificates can be
transferred to the joint ownership and then sent for Dematerialization.

Right now, as per the Companies Act, there is no nomination facility for shares (whether in the
physical or in the electronic form). The nomination facility for shares can be availed of only when the
relevant provisions in the Companies Act are amended. NSDL captures the details of the nominee
when the account is opened so as to offer the facility as soon as the relevant amendments are effected
in the Law.

A client can choose to open more than one account with same DP. In addition to this, he has a choice of
opening accounts with more than one DP. However a broker can open just one Clearing Member
account per card/ stock exchange for clearing purpose, but he can still open multiple beneficiary
accounts Beneficiary is the personal account wherein brokers can keep their personal holdings.

Account opening
Any investor who wishes to avail depository services must first open an account with a depository
participant of NSDL The process of opening a Demat account is very similar to a bank account The
investor can open an account with any depository participant of NSDL An investor may open an
account with several DPs or he may open several account with single There are several DPs offering
various depositary related services. Each DP is free to fix its own fee structure Investors have the
freedom to choose a DP based on criteria like convenience , comfort has to enter into an agreement
with the DP The form and contents of this agreement are specified by the business rules of NSLD

Types of depositary account depends on the operation to be performed There are three types of Demat
accounts which can be opened with a depositary participant viz
(a) Beneficiary Account (b) Clearing member Accounts and (c) intermediary account
 Types of accounts

Beneficial owner Clearing member Intermediary

Account Account Account

House Non-House

 A DP may be required to open three categories of accounts for client –beneficiary account,
clearing member account and intermediary account
 A beneficiary account is an ownership account The holder/s of securities in this type of account
own those securities
 The clearing member account and intermediary account are transitory account The securities in
these are held for commercial purpose only
 A clearing member account is opened by a broker or a clearing member for the purpose of
settlement of trades
 An intermediary account can opened by a SEBI registered intermediary for the purpose of stock
leading and borrowing
 BENEFICIARY ACCOUNT

This is an account opened by investor to hold their securities in dematerialized from with a depository
and to carry out the transactions of sale purchase of such securities in book entry form through the
depositary system A beneficiary account holder is legally entitled for all rights and liabilities attached
to the securities held in that account Therefore, the account is called “beneficial owner account” a
beneficial account can be in the name of individual, corporate, HUF, minor, bank, financial institution ,
trust etc or the broker himself for the purpose of his personal investments in demat form. The account
is opened with a DP.

House account vs. non –house account opened by a DP for the custody of and transactions in its own
investment is referred to as a house account DP’s are required to open house accounts for their own
investments to prevent co-mingling of asset with that of their clients

Neither the depositories ACT nor the regulations made under the act lay down any specifications about
who can open a beneficiary account since all beneficial owners are deemed to be member of a company
(under section 41 (3) of the companies act) only those who are eligible to become members of a
company act can open a beneficiary account with a depository Thus all legal entities with the exception
of partnership firms can open an account in the depository system

Documents for verification: For the purpose of verification, all investors have to submit the following
documents along with the prescribed account opening form

Proof of identity- a beneficiary account must be opened only after obtaining a proof of identity
of the applicant The applicants signature and photograph must be authenticated by an existing
account holder or by the applicant bank or after due verification made with the original of the
applicants valid passport, voter id, driving license or PAN card with photograph and further

Proof of address- The account opening form should be supported with proof of address such as
verified copies of ration card/ passport/ voter ID/ PAN card/driving license / bank passbook an
authorized official of the participant, under his signature, shall verify the original documents

In case any account holder fails o produce the original documents for verification within the
foreside period of 30 days, it must be immediately brought to the notice of NSDL Failure to
produce the original within the prescribed time would invite appropriate action against such
account holder, which could even include freezing of their accounts

Common information: The process of opening an account with a depository, nature of such an
account, and various factors to be considered for opening a depository account is explained
below. Some details are common to all types of accounts. These are:

1. Name of the holder Date of birth (for individual accounts)

2. Occupation

3. Address & phone / fax number

4. Bank details like name of the bank, type of the account (current/savings), accounts
number, branch address, MICR, etc

5. PAN number, if applicable

6. Details of nomination

7. Specimen signatures

8. Beneficiary account- procedure for opening an account

Investor have the choice of selecting a DP based on their convenience, comfort, service, levels,
safety, reputation charges, etc they have flexibility to have more than one account with the same
DP or any other DPS No minimum balance is required for opening a depository account
Investor also have the freedom to close an account with one DP and open another one with any
other DP

The type of the account opening from to field by an investor and the list of documents required
depend on the type of beneficiary account to be opened –whether it is for NRI’s or corporate or
individual Further, the individual account can be in a signal name or joint name clearing
members and brokers have to open in a beneficiary account if they have to deal with their own
holdings
There are several client types in the depository system and different codes are allotted to them. These
are listed below
1. Resident
 Ordinary
 HUF
2. Financial institutions
 Government –sponsored FI
 State financial corporation
 Other
3. FIIS
 Mauritius –based
 Others
4. NRI
 Repatriable
 Non-Repatriable
 Depository receipt
5. Body corporate
 Domestic company
 Overseas corporate body Repatriable
 Government company
 Central government
 State government
 Co-operative body
 NBFC
 Non –NBFC
6. CM (clearing member)
7. Foreign national – national /depository receipt
8. Mutual fund –depository receipt
9. Trust, Bank
10. Intermediary
Clearing Member Account

The entities that are authorized to pay out from a clearing corporation/ clearing house against traders
done by them or their clients are known as clearing members. CMs are identified in the system through
their CM-BP ID. All pay-in and pay-out transactions are carried out through their accounts.
There are two types of clearing members:
1. All members of a stock exchange popularly know as brokers, are clearing members;
2. Custodians who are permitted by the stock exchange to act as a clearing members.

PROCEDURE TO OPEN A CLEARING MEMBER ACCOUNT

The steps undertaken to open the account are same as those of the individuals, difference lies in the
type of the clearing members has to first register itself with the depository and obtain a business partner
identification number (CM-BP-ID). The clearing member is identified by the combination of CC-CM-
ID given by the DP.

Immediately after opening a clearing account, the DP should inform the depository the details of
clearing members name, CM-BP-ID, client-ID, and date of the opening the account in DPM system.

The clearing account should only be for clearing and settlement purpose and nit for any other purpose,
e.g., holding of securities received in a settlement received in a settlement account should be
transferred to the transferred to respective beneficial accounts as soon as possible, but in no case later
than the time prescribed by the depository/ stock exchange/ SEBI in this regard. The opening of
clearing members account constitutes a “standing instruction” to receive credits from the clearing
corporation when there is a pay-out.

The Clearing House deals with ONLY ONE designated account for pay-in and pay-out with the
Broker. This single account allows you to know to which account securities must be delivered and
received from. One Clearing Member Pool Account is opened per card / Stock Exchange to settle
trades in the Dematerialized form.
 Structure of Clearing Account

The clearing account is identified in the depository system by its CM-BP-ID. The internal structure of
the Clearing Account consists of three parts to facilitate easy book keeping.

 Arrangement of clearing account

 Pool Account
 Delivery Account
 Receipt Account

Clearing Corporation (CC)/Clearing House (CH)

Clearing Account
Delivery Account Pool Account Receipt Account

Selling Buying
client Client

a) Pool Account: It has two roles in clearing of Securities, viz., before pay-in, the selling client
of the clearing member transfers securities from his client Account to the Clearing Account.
After receiving pay-out, the clearing member transfers securities from his Clearing Account to
the account of the buying client.
b) Delivery Account: The securities before pay-in, the securities move from the Pool Account
To the Delivery Account. The movement will be automatic if clearing member has given such
an undertaking to its Clearing If the Clearing Corporation. It will be effected on the basis of
instruction received from the Clearing house/ Clearing Corporation. If the clearing house/
Clearing Corporation has not taken such undertaking, the clearing member to its DP must
submit a delivery instruction form. At the time of pay-in, NSDL flushes out the securities in the
Delivery Account & transfers the same to the Clearing house/ Clearing Corporation.
c) Receipt Account: On pay-out day, the Clearing house/ Clearing Corporation transfers
securities to the Pool Account (to The extent of net receipt) through the Receipt Account. This
account can be used to trace details of settlement-wise receipt of the clearing member.
Market Type & Settlements Number: A clearing account can be broken into compartment and
sub-compartments. Each compartment can be called as market type and be as settlement number.
Hence, if securities are moved from any clearing account, apart from the CM-BP-ID, the combination
of market type and settlement number must be provided. A diagrammatic illustration of the internal
structure of a clearing account is depicted in next page.

Clearing Account
(IN503265)

Physical Rolling Action Rolling

2000014 9000152 2000248

Delivery Pool Receipt Delivery Pool Receipt Delivery Pool Receipt

2000015 9000153 2000248

Delivery Pool Receipt Delivery Pool Receipt Delivery Pool Receipt

2000016 9000152 2000249

Delivery Pool Receipt Delivery Pool Receipt Delivery Pool Receipt
CHAPTER – 3
Depository
 Depository

A Depository is a Company where the shares of an individual are held in the electronic form, at the
request of the shareholder. This eliminates the physical form of holding. IDBI, UTI, SBI and NSE
promoted the National Securities Depository Limited (NSDL). The Central Securities Depository
Limited (CDSL) was promoted by BSE.

Your money may be held in the form of liquid cash at your home or may be deposited in a bank. The
advantages of safety and convenience of dealing with a Bank overweigh the reasons for holding liquid
cash in your home. Your financial assets such as Equity Shares may be compared to the above example.
You may hold physical share certificates in your home and be exposed to the various risks of lack of
safety, mutilation, loss etc. Alternatively, you may deposit your shares in an organization called a
Depository, which holds your shares in the electronic form. You can dematerialize shares of only those
companies that have signed agreement to dematerialize their shares with the depository. You cannot
dematerialize shares if they are not in your name, i.e. shares held in street name (market deliveries)
cannot be dematerialized. However, when you send shares to the registrar to be transferred to your
name you can request that you want those shares in dematerialized form.

Karvy Consultants Ltd. has four DPMs as on date. They are:

1.Hyderabad-IN300394
2.Lucknow - IN301557
3.Bangalore- IN301926
4. Mumbai - IN302470

In India depositories are required to be registered with SEBI and are governed by the provision of the
Depositories Act, 1996 and regulation and bylaws framed for depositories by the SEBI.

The depositories work in a completely computerized environment with electronic linkages with the
point of origination for the transactions that may cause the change in ownership of securities. A
depository will be electrically linked with the Register of the members maintained by the
company/registrar, clearing and settlement system in the stock exchanges, stock lending organization
(if in existence), custodians of securities, depository participants and brokers.
 Function of Depository

Dematerlisation: one of the primary functions of depository is to eliminate or minimize the movement
of the physical securities in the market. This is achieved through dematerialisation of securities.
Dematerlisation is the process of converting securities held in physical form into holdings in book entry
form.

Account Transfer: The depository gives effect to all transfers resulting from the settlement of trade
and other transactions between various beneficial owners by recording entries in the accounts of such
beneficial owners.

Transfer and Registration: A transfer is the legal change of ownership of a security in the records of
the issuer. For effecting a transfer, certain legal steps have to be taken like endorsement, execution of a
transfer of security occurs merely by passing book entries in the records of the depositories, on the
instructions of the beneficial owners.

Corporate Actions: A depository may handle corporate actions in two ways. In the first case, it merely
provides information to the issuer about the persons entitled to receive corporate benefits. In the other
case, depository itself takes the responsibility of distribution of corporate benefits.

Pledge and hypothecation: Depositories allow the securities placed with them to be used as collateral
securities in physical form to the lender or its custodian. These securities are verified for authenticity
and often need to be transferred in the name of lender. This has a time and money cost by way of
transfer fees or stamp duty. If the borrower wants to substitute the Pledging/Hypothecating the
securities makes the process very simple and collateral accounting through book entries in the records
of the depository.

Linkage with clearing system: whether it is a separating clearing corporation attached to a stock
exchange or a clearing house (department) of a stock exchange, the clearing system performs the
function of ascertaining the pay-in (sell) or pay-out (buy) of brokers who have traded on the stock
exchange. Actual delivery of securities to the clearing system from the selling and delivery of securities
from the clearing system to the buying broker is done by the depository. To achieve this, depositories
and the clearing system should be electronically linked.
 Depository Participant

Depository Participant (DP) is an organisation that acts as an Agent of the Depository and interacts
with the investor. A DP is responsible for maintaining your securities account and operating it only
under your written instructions. The Depositories Acts mandates that investors can use Depository
facilities only through DP’s. The distribution channel and geographical spread of the DP’s offices
allows you to access the Depository at a low cost. DP can only access their own clients' information.
They cannot access the client information of any other DP. The information of your holdings in the
account is completely confidential& it is similar to your account balance in a bank.

You can select your DP to open a demat account just like you select a bank for opening a savings
account. Some of the important factors for selection of a DP can be:

1. Convenience - Proximity to your office/residence, business hours.

2. Comfort - Reputation of the DP, past association with the organisation, whether the DP is in a
position to give the specific service you may need?
3. Cost - The service charges levied by DP and the service standards.

Individual accounts can be opened by Ordinary Resident, HUF, NRI Repatriable and NRI Non-
Repatriable. Body Corporate, Banks, Trusts, Financial Institutions, Foreign Institutional Investors, and
Overseas Commercial Banks etc can open corporate Accounts. An account can be opened in the name
of HUF in a similar way to individual account and mentioning the account category as HUF. However,
Kartha of HUF will sign the application, agreement and all transactions under the account

An account cannot be opened in the name of the firm. It has to be opened in the name of any of the
Partner as an Individual account only.
 DEMAT PROCESS
The demat process requires defacing of securities which will make the security certificate undeliverable
unless the demat formalities are completed. Therefore, the client should be assisted in ascertaining
whether the securities in question are available for demineralisation. Clients should be helped in filling
up the demat request properly. Demat rejection causes great inconvenience to the client. DP should
attend to this area with care and caution. One of the important reasons for demat rejection is signature
mismatch. Taking the following precaution can reduce this:
 If the client is aware that the signature with the company& signature of the client should be
advised to the register the new signature.
 If the signature is slightly different, client should be advised to sign as per the signature that was
recorded by the company and as recorded with the DP.
 Ensure dispatch of DRFs and certificate to R &T Agents within seven days.
 Client may be encouraged to use the Transfer-cum-demat facility if it is offered by the
company. They should be made aware of the procedures of the scheme.
 In case of joint holdings, the clients should be informed about the availability of Transposition
cum Demat facility.
 CLOSURE OF ACCOUNT
Closure on Client’s Request- A DP can close a depository account on receipt of an application in the
prescribed format. The application should be made by the account. In case joint-holders. An account
can be closed sought to be closed, the following steps are necessary.

a. Re-materialization of all securities standing to the credit of the same account making the
application for closure; or
b. Transferring the balance to the credit of another account opened by the same account
holder(s) either with the same participant or with a different participant.
Before closing the account the DP should ensure that all pending transactions have been settled. The
request for closure should be processed only after ensuring that there is no balance lying in the account.

Consolidations of accounts- Some clients have opened multiple accounts to dematerialize their shares
held in multiple combination and sequence of names. However, they may not need so many accounts
after they have dematerialized their shares and may want to bring all their share holdings into one or
fewer accounts. This can be achieved by using normal off Market transfer instruction.

Closure by DP – the DP may also initiate closure of a client’s account if the client has defaulted in
performing should give sufficient notice to the client before initiating closure of his account. The notice
should clearly state the reasons for closure of his account. The notice should clearly state the reasons
for closure of account. The process of closing account in such a case is the same that of client-initiated
closure.

Closure/ Shifting of Clearing Account – A clearing member may transfer its clearing account from
one DP to another DP. For this, simultaneously applications have to be made for closure of account to
the earlier DP and for opening of new clearing member account to the new DP. On receipt of the
application, the new DP forwards the application to the depository for approval and allotment of a new
CM-BP-ID is allotted, the new DP opens a new Clearing account and intimates the depository about the
new client- ID. On receipt of intimation from the intimates the clearing member. All pay-out of
securities, subsequent to the closure of old clearing account, take place in the new account. Pg-17-3
 TRADING & SETTLEMENT
This is an area where the DP must take immense care while accepting and processing request listed
below should from the account of his client to another account. The aspects listed below should be kept
in mind.
 Ensure that the delivery instruction book given to each client has pre-printed serial number and
client-ID.
 Inform clients about the pay-in deadline of the stock exchange and the deadline of the DP.
 Each DIS received should be inwarded correctly with the date and time stamp.
 Late stamp must be affixed on the instructions received after the expiry of the deadline set by
the DP.
 Ensure the correctness of execution date on the DIS.
 Ensure signature on DIS matches with the records of the DP.
 Ensure that the signatures of all holders are obtain in case of joint accounts.
 If the client has not issued “standing instructions”, he should be made aware that a receipt in
instruction will be required to the credits into the account on purchase of shares.
 Client should be made aware of the accounting freezing facility.
 SETTLEMENT

The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/
clearing house (CH) of the corresponding stock exchanges. While the settlement of dematerialized
securities is effected through depository, the funds settlement is effected through the clearing banks.
The clearing members directly with the CC/ CH settle the physical securities.

Exclusive demat segment follows rolling settlement (T+5) cycle and the unified (erstwhile - physical)
segment follows account period settlement cycle. In case of rolling settlement cycle, the account period
is reduced to one day.

 In case of settlement of trades done in exclusive demat segments, the pay-in and pay out of
funds and securities are effected on the same day afternoon and evening (same day) thus
reducing the blockage of funds and limiting exposure to the clearing corporation.
 Settlement of funds is effected through the clearing banks and depository plays no role in this.
 Settlement of securities is effected through NSDL depository system.
 Clearing and settlement of the regular market trades is effected through the clearing members of
the clearing houses of respective stock exchanges. All trading members of stock exchanges are
clearing members of clearing houses. In addition, for settlement of institutional trades,
custodians are also allowed to act as clearing members.
 Clearing members of clearing house, dealing in dematerialized securities are expected to open a
clearing account with any DP for the purpose of settling trades in dematerialized securities. As,
in the mixed (unified) segment, there is a possibility for all clearing members to receive
dematerialized securities, they are expected to open clearing accounts.

If there is any short delivery at the time of pay-in of securities, these short positions are auctioned in the
Demat segment as done in the Unified (erstwhile-physical) segment.
 DEMAT SHARES: ARE THEY 100% SAFE

When you buy physical shares from the stock market, you could never be certain of the validity of the
title of shares. There were many reasons- the sellers' signature did not match, or the certificates were
fake, forged or stolen, and so on.

Demat shares are supposed to obviate these problems. Buying shares in the demat form always
guarantees you a good title as soon as the settlement is over. The biggest attraction of trading in demat
shares is that the shares you buy come with a clean title and immediately after the settlement on the
relevant stock exchange.

Rule 100 of market regulator SEBI determines whether the shares delivered in a settlement, are good or
not. Under rule 100, the shares that have been transferred the company can still withdraw any number
of times, if a transfer is found to be invalid for any reason.

Suppose a sells physical shares to B and B gets them dematerialized. Later B sells the shares in the
stock exchange and C buys them. Meanwhile A discovers that his share certificates were stolen and
fraudulently sold by someone else. He gets a court order restraining the company from further
transferring the shares and attaching them (currently in possession of C). This is known as 'stop
transfer'. So C who has bought dematerialized shares is now struck with the shares. He cannot sell these
shares since they would be frozen in his account

In demat shares, pre-demat problems about the validity of a share do not affect the interest of the
buyers after dematerialization. Shares go through a verification process at the registrars' before they are
dematerialized.

Therefore the responsibility lies with the registrar. The registrar must find a remedy if the original
transfer of shares, before their dematerialization comers under doubt. But there is a catch. The company
and its registrars are not responsible if the reasons for original transfer being invalid were not available
at the time of dematerialization. Matters have to be dealt with on a case-to-case basis. Which means
that even demat buyer may find that his shares have been frozen in his demat account. This kind of case
has to be contested in court by the parties involved.
 CHAPTER – 4
RESEARCH METHODOLOGY
 RESEARCH OBJECTIVES
 The main objective is to evaluate services provided by KARVY FINANCIAL
CONSULTANTS
 To know the satisfaction level of Customers
 To know the behaviour of people regarding service provided by KARVY
 To know the services of DP.

PROBLEM STATEMENT
Title of the project

“CUSTOMER SATISFACTION ON DEPOSITORY SERVICES WITH SPECIAL

REFERENCE TO KARVY”

Statement of the Problem: KARVY STOCK BROKING Ltd is providing the Demat
service. Hence in this report an attempt is made to know the present customer satisfaction
towards depository participants.

DESIGN OF THE STUDY

Data Collection Method:

1. PRIMARY DATA: For a study of this nature primary data is collected through
Questionnaire.
2. SECONDARY DATA: This is been is collected through Karvy’s Record & Report,
Magazine & Websites.

Sampling Procedure:

Sample size: 100 customers of Karvy Stock Broking Ltd.

Area Covered for research: Only KARVY customers Faridabad’s local office.

Random sampling method from available database. In the present scenario the service industry has
given an utmost importance of doing a particular task at a fastest time in order to satisfy the customer
and to attract new customer. In this project we can find out the customer of Karvy Consultant have
satisfied with demat service and this DP is overcoming the disadvantages of the physical trading of the
securities in the stock exchange.

 Level of accuracy of the results of research is restricted to the accuracy level with
which the customers have given th eir answers and the accuracy level of the
answers cannot be predicted.

LIMITATION OF STUDY

 Since Sample size is only 100 and all Hundred customers are approached.
 Since segment wise investor is available in KARVY STOCK BROKING Ltd.
Overall concept is taken for the study.
 Information is partly based on secondary data and hence the authenticity of the
study can be visualized and is measurable.
 CHAPTER – 5
DATA PROCESSING & ANALYSIS
 ANALYSIS OF CUSTOMER SATISFACTION

1. How do you come to know about KARVY FINANCIAL CONSULTANTS?

1 2 3 4 5
News Papers/
Friends Business Magazines Online Agent/Financial Others
47 18 10 14 11

Friends
11%
News
Papers/BusinessMagazines
14%
47%
Online
10%
Agent/Financial

18%
Others

Source: Survey Data

INTERPRETATION
From the above figure 47% respondents came to know about Karvy Financial Consultants through
friends and 18% get know about from newspapers, 10% online, 14% agent and 11% other.
2. Are you satisfied with the services of KARVY FINANCIAL CONSULTANTS?

Yes
No

94 6

No
6%

Yes
Yes No
94%

Source: Survey Data

INTERPRETATION
From the above figure and chart shows that 94% of respondents are satisfied with KARVY
FINANCIAL CONSULTANT and only 6% respondents are not satisfied.
3. Do you agree that the services provided by KARVY FINANCIAL
CONSULTANTS are at par with its competitors?

Agree Just agree No Opinion Just Disagree Disagree

47 45 8 0 0

50
45 47 45
40
35
30
25 Series1
20
15
10
8
5
0 0 0
Agree Just agree No Opinion Just Disagree
Disagree

Source: Survey Data

INTERPRETATION
From the above figure and chart shows that 92% of respondents are agreeing to the fact yes services
provided by their consultant are at par with the industry and only 8% of respondent are not interest to
give their opinion.
4. Will you recommend the service of KARVY FINANCIAL CONSULTANTS to

your friends and relatives?

Agree Just agree No Opinion Just Disagree Disagree

69 24 7 0 0

80

70

60
Agree
50
Just agree
40
No Opinion
69
30
Just Disagree
20
Disagree
10 24
7
0 0 0
Agree Just agree No Opinion Just Disagree
Disagree

Source: Survey Data

INTERPRETATION
From the above figure and chart shows that 93% of respondents are interested and are ready to
recommend “KARVY FINANCIAL CONSULTANT” to their friends and relatives and this is because
of their attitude. 7% of respondent are constant.
5. Do you think that still KARVY FINANCIAL CONSULTANTS need to improve
upon their services to keep the pace with ever dynamic and updated capital
market?

Yes No

86 14

No
14%

Yes Yes No
86%

Source: Survey Data

INTERPRETATION

From the above figure and chart shows that 86% of respondents are in favor that “KARVY
FINANCIAL CONSULTANT” should use more technological advancements to improve their services.
6. Do you agree that KARVY FINANCIAL CONSULTANTS service of DP is better

than other DP services?

Agree Just agree No Opinion Just Disagree Disagree

41 37 20 1 1

45 41
40 37
35
Agree
30
Just agree
25
20 No Opinion
20
Just Disagree
15
Disagree
10
5 1 1
0
Agree Just agree No Opinion Just Disagree
Disagree
.

Source: Survey Data

INTERPRETATION

From the above figure shows that 78% of respondents are satisfied dealing with “KARVY
FINANCIAL CONSULTANT” because of their best service which is better than other DP services.
20% of Respondent has not given their opinion. Only 1% of respondent disagrees.
7. What were the problems faced by you in your dealings with your DP?

Frequently reminders are given to karvy consultant ltd., for update

A 4 4%
the information
B Irregular receipt of Holding/Transaction statement 1 1%
Improper attention given to the enquires
C 5 5%

D Improper format of Holding/Transaction statement 1 1%

Billing problems
E 1 1%

F Inadequate information 2 2%

A B C D E F
4 1 5 1 1 2

5
5

4 a
4 b
c
3
d
2
2 e
f
1 1 1
1

0
1

Source: Survey Data

INTERPRETATION
From the above figure and chart shows that 5% of the respondents are unsatisfied with Improper
attention given to the enquiries. 4% of the respondent are unsatisfied with frequently reminders are
given to karvy consultant ltd., for update the information given by DP. So, proper communication with
the Respondent & update information is required.
8. How do you rate the services of your DP?

0% 20% 40% 60% 80% 100%

0 0 11 31 53 5

Series1 Series1, low , 0% Series1,

, Veryhigh,
verylow 13%
, 0%

Veryhigh

High
Series1, Series
resonable , 1, High
resonable
62% , 25%

low

verylow

Source: Survey Data

INTERPRETATION
From the above figure and chart shows that 53% of the respondent are satisfied and have rated 80% to
the services given by DP; 31% of the respondent have rated 60% to service and 11% of the respondent
have rated 40% of the service. On the top of the list 5% of respondent have rated 100% of the service.
 CONCLUSION

Since it is service based industry, the customer plays vital role, so in order to satisfy the customer
appoint more no of well qualified agents who can communicate respondents to improve the services,
give more advertisement in Newspapers, local TV channel, to overcome the overcrowding and non-
availability of telephone links proper measure should be taken.
 BIBLIOGRAPHY

Web sites
 www.karvy.com
 www.indiainfoline.com
 www.sharekhan.com
 info@nsdl.co.in

Books

 Company books & Brochures

 NSDL Books
 QUESTIONNAIRE

Dear Sir/Madam,

A very Good Morning. I am a student of Satyug Darshan Institute of Engineering & Technology. As per
our academic curriculum we are supposed to collect certain information for the purpose of our research
work. I assure you that data collected will be used only for academic purpose.

NAME : ____________________________

ADDRESS : ____________________________
____________________________
OCCUPATION: __________________________ Phone No: __________

1. I came to know about KARVY FINANCIAL CONSULTANTS from

1 2 3 5
4
Friends News Papers Online Others
/Business Magazine Agent/Financial
Agency

2. I am interested in visiting KARVY FINANCIAL CONSULTANTS because they provide

quick and timely service.

1) Yes 2) No

3. I have been using service of KARVY FINANCIAL CONSULTANTS

because of the low cost, visual pleasure, Hospitality, Communication, and new concept of
financial consultancy

1 2 3 5
4
Agree Just Agree No opinion Disagree
Just disagree
4. In future I will be definitely using the service of KARVY FINANCIAL CONSULTANTS
because of the attitude of the employees towards customers.

1 2 3 5
4
Agree Just Agree No opinion Disagree
Just disagree

5. I will definitely use service of KARVY FINANCIAL CONSULTANTS because of the benefit
I get from KARVY FINANCIAL CONSULTANTS

1 2 3 5
4
Agree Just Agree No opinion Disagree
Just disagree

6. I am interested in KARVY FINANCIAL CONSULTANTS because of the new scheme

introduced frequently and benefit from such scheme

1) Yes 2) No

7. I use KARVY FINANCIAL CONSULTANTS because they know customer value as well as
money value of customers

1 2 3 5
4
Agree Just Agree No opinion Disagree
Just disagree

8. KARVY FINANCIAL CONSULTANTS service of DP are better than other DP services.

1 2 3 5
4
Agree Just Agree No opinion Disagree
Just disagree
9. Express your satisfaction levels about the following scheme/service please tick.

Extremely Satisfied Neither Extremely

Satisfied satisfied/nor unsatisfied Unsatisfied
Schemes/services unsatisfied
a. Demat
b. Settlement
(Selling/purchasing)
c. Freezing/
defreezing Of
an account
d. Loan against
shares
e. Share trading
f Periodic statements
g. Telephone queries
h. Co-operation by
staff
i. Bills Acceptance

10. If you have faced any when dealing through your DP or you are unsatisfied with the above
mentioned services/schemes.

Frequently reminders are given to KARVY FININCIAL CONSULTANTS. For update

the information

Irregular receipt of Holding/Transaction statement

Improper attention given to the enquires

Improper format of Holding/Transaction statement

Billing problems

Inadequate information

Other specify___________________

11. Please tick the following:

Tariff 1 2 3 4 5
Structure Very High High Reasonable Low Very Low
12. How do you rate the services of your DP

0% 20% 40% 60% 80% 100%

13. How do you justify your preference for your KARVY FINANCIAL CONSULTANTS DP over
other DP’s?

1 2 3 4 5
Quality Rates Nothing in Safety Reach
Service Charged particular

14.
A) Your age (Yrs)
<25 26-35 36-45 46-60 > 60

B) Income (Pa)
<60000 60000-1.2 L 1. 2 L– 2.4 L

2.4 L– 3.6L 3.6 L – 6.0.L 6.0 L –12.0 L

C) Education
Up to Xth Graduate Post Graduate. PhD. Others.

D) Yearly of investment.
1L-5 L 5L-10L >10L

15. Suggestion ______________________________________________

______________________________________________