NDSL: Depository functions and services

Type :

Indian project

Pages :

51 pages

Format :

.doc

Published date :

05/08/2009

Category :

Economics & finance

Sub category :

Finance

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Summary :

Introduction
Project objectives
Functioning and services of National Securities Depository Limited (NSDL)
1. Promoters
2. Shareholders
An introduction to depository participants
An analogy of NSDL
An overview of demat account
Concept of loan against shares
Research methodology
Conclusion
Bibliography

Abstract

The Indian capital market has witnessed an unprecedented growth in the past few years, facilitated by modernization of the trading system. Automation of the trading infrastructure in 1994 has given us a trading system comparable with the best in the world. The establishment of a settlement guarantees scheme has removed counterpart risk in trading. Though the advent of automated trading brought with it several associated benefits such as transparency and equal opportunity for market players all over the country; the problems related to settlement of trades such as high instances of bad deliveries and delay in transfer of ownership have continued. As an answer to the myriad settlement problems, National Securities depository Limited (NSDL) was inaugurated in November 1996 as the first depository in the country. Although India had a vibrant capital market, which is more than a century old, the paper-based settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national statue responsible for economic development of the country has since established a national infrastructure of international standard that handles most of the trading and settlement in dematerialized form in the Indian market. Using innovative and flexible technological systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and reduce cost. IDBI is the largest financial institution in India. It has been set up for providing credit facilities for the establishment and development of industries. UTI is the largest Mutual Fund in India. Established under UTI Act, 1963 with a view to encourage savings and participation in investments. NSE was established with a view to provide a fair, efficient and transparent securities market to investors all over the country has emerged as the largest stock exchange in India.