• Roles and Functions

• Elimination of fraud Cases and bad deliveries

As depositories have replaced the postal system, it has eliminated the error involved
in errors in bad postal deliveries, and risk of fake physical certificates.

• Reduces risk of loss & damage of physical certificates

Because of dematerialisaton, the risk of losing or having the physical certificates

getting damaged has reduced a lot.

• Facilities transfer of dividends & other benefits

Depositories maintain a complete record of ownership of securities in its accounts in

electronic form. Because of this it is easy for depositories to transfer dividends and
benefits to the right people.

• Avoids blank transfers and benami transactions

Benami transactions – These are the transactions done by one person in the name of
another person. It can be used for evasion of taxes or money laundering. But
depositories verify all documents of securities properly before dematerialising them
so this risk is reduced.

Blank transfer – This happens when the seller of share certificate signs his name on
the share certificate but does not put the buyer date and name on it.

But Depositories verify all documents of securities properly before dematerialising

them.
Good afternoon everyone

I will be talking about depository institutions in India

• So there are two depositories in India. NSDL and CDSL

Let us understand the objectives of these depositories

• So, Depository aims at reducing the cost of transfer of securities and makes the transfer of
securities fungible. Fungible means mutually interchangeable

• Also, they aim at reducing the delay in transfer of securities.

Now let us see roles and functions of depository

• Because of replacement of physical infrastructure structure with digital, there is an

Elimination of many fraud Cases and bad deliveries.

• Depositories also Reduce the risk in loss & damage of physical certificates because of
dematerialization.

• Depositories keep a record of ownership of securities in electronic form so it is easier to

transfer and facilitate various benefits.

• Because of the digital infrastructure and proper verification of documents, depositories

Avoid blank transfers and benami transactions