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CONSUMER PERCEPTION ABOUT
DEPOSITORY SYSTEM IN CHANDIGARH
Final Project Report
Su!itte" to Punjai Uni#er$it% Sc&ool o' Bu$ine$$ Stu"ie$ in partial
Ful'ill!ent o' t&e re(uire!ent 'or t&e "e)ree o'
Ma$ter o' Bu$ine$$ A"!ini$tration
Su!itte" %
Harin"er Sin)& Te!po * B&oon" * Glu+ * C&ora
Roll No, -./0
1223
Punjai Uni#er$it% Sc&ool o' Bu$ine$$ Stu"ie$
Guru 4a$&i Ca!pu$5 Tal6an"i Sao,
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PREFACE
The tremendous advance in technology and the aggressive infusion of information
technology has brought in a paradigm shift in banking operation. Internet banking that
has revolutionized the banking industry world wide has turned out to be the nucleus issue
of various studies of all over the world. However there has constantly been a literature
gap on the issue of India. The purpose of the paper is to help fill significant gaps in
knowledge about the Internet Banking landscape in India. The paper presents data,
drawn from a survey of private, foreign and public banks that offer Internet banking and
on the products and services they offer, investigates the profile of banks that offer
Internet banking using various statistical analyses, relative to above mentioned banks
with respect to competitive analysis.
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AC4NO78EDGEMENT
Words often fail to epress one!s inner feeling of indebtedness. Infact words are not
proper media for this purpose.
It is my proud privilege to epress my profound indebtedness and deep sense of gratitude
to "iss #hashi $ggarwal who had been kind enough to impart his inspiring advice and
valuable guidance to me during my research work.
He provided his untiring efforts and encouragement throughout my research period
inspite of his busy schedule.
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CERTIFICATE
This is to certify that the pro%ect entitled &'onsumer (erception $bout )epository
#ystem in 'handigarh* #ubmitted by Harbinder #ingh is a bonafide piece of work
conducted under my supervision and guidance. +o part of this pro%ect has been submitted
per any other degree of any other degree of any other university. The data services have
been duly acknowledged. It may be considered for evaluation in partial fulfillment of the
degree of "aster of Business $dministration.
(ro%ect uide
-"iss #hashi $ggarwal
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INDE9
CHAPTER - INTRODUCTION
CHAPTER 1 RE:IE7 OF 8ITERATURE
CHAPTER ; RESEARCH MEHTODO8OGY
CHAPTER / ANA8YSIS AND INTERPRETATION
CHAPTER < CONC8USION
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INTRODUCTION
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INTRODUCTION TO DEPOSITORY SYSTEM IN INDIA
/ne of the biggest problems faced by the Indian 'apital "arket has been the manual and
paper based settlement system. 0nder this system, the clearing and settlement of
transactions take place only with the use of paper work. The system of physical delivery
of scrips poses many problems for purchaser as well as the seller in the form of delayed
settlements.
Thus, to eliminate paper work, facilitate scrip less trading and electronic book entry of
the transfer of securities, it was found necessary to replace the old system of transfer and
settlement with the new and modern system of depositories.
$ccordingly the overnment of India enacted the )epositories $ct in 1223 for the
orderly growth and the development of the Indian 'apital "arket. The governing body of
#4BI approved the draft of #4BI -depositories and participants regulation act 1223. The
government of India on 5uly 16,1227 introduced the depository bill to usher scrip less
trading. +ational securities depository ltd. (romoted by Industrial )evelopment Bank of
India, 0nit Trust of India and the +ational #tock 4change emerged as the first
depository to be registered in India.
$ )epository #ystem is a facility for holding securities which enables securities
transactions to be processed by book entry. To achieve this purpose, the depository may
immobilize the securities or dematerialize them -so that they eist only as electronic
records.
India has chosen the dematerialize route. In India, a depository is an organization, which
hold the beneficial owner!s securities in electronic form, through a )epository (articipant
-)(. $ depository functions some what similar a commercial Bank. To avail of the
services offered by a depository the investor has to open an account with it through a
registered )(.
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Bene'it$ o' Depo$itor% S%$te!
In the depository system, the ownership and transfer of securities takes place by means of
electronic book entries. $t the outset, this system rids the capital market of the dangers
related to handling of paper. +#)8 provides numerous direct and indirect benefits like9
Eli!ination o' a" "eli#erie$ = In the depository environment, once holdings of an
investor are dematerialized, the :uestion of bad delivery does not arise i.e. they cannot be
held &under ob%ection*. In the physical environment, buyer was re:uired to take the risk
of transfer and face uncertainty of the :uality of assets purchased. In a depository
environment good money certainty begets good :uality of assets.
Eli!ination o' all ri$+$ a$$ociate" 6it& p&%$ical certi'icate = )ealing in physical
securities have associated security risks of theft of stocks, mutilation of certificates, loss
of certificates during movements through and from the registrars, thus eposing the
investor to the cost of obtaining duplicate certificates etc. This problem does not arise in
the depository environment.
No $ta!p "ut%=;or transfer of any kind of securities in the depository. This waiver
etends to e:uity shares, debt instruments and units of mutual fund.
I!!e"iate tran$'er an" re)i$tration o' $ecuritie$ = In the depository environment,
once the #ecurities are credited to the investors account on pay out, he becomes the legal
owner of the securities. There is no further need to sent it to the company!s registrar for
registration. Having purchased securities in the physical environment, the investor has to
send it to the company!s registrar so that the change of ownership can be registered.
This process usually takes around three to four months and is rarely completed within the
statutory framework of two months thus eposing the investor to opportunity cost of
delay in transfer and to risk of loss in transit. To overcome this, the normally accepted
practice is to hold the securities in street names i.e not to register the change of
ownership. However, if the investors miss a book closure the securities are not good for
delivery and the investor would also stand to loose his corporate entitlements.
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Fa$ter $ettle!ent c%cle =The settlement cycle follow rolling settlement on T
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Sa'et%
There are various checks and measures in the depository system to ensure safety of the
investor holdings. These include9
$ )( can be operational only after registration by #4BI, Which is based on the
recommendation from +#)8 and their own independent evaluation. #4BI has prescribed
criteria for becoming a )( in the regulations.
)(s are allowed to effect any debit and credit to an account only on the basis of valid
instruction from the client.
4very day, there is a system driven mandatory reconciliation between )( and +#)8.
$ll transactions are recorded as +#)8 'entral #ystem and in the databases maintained
by business partners.
There are periodic inspections into the activities of both )( and ?@T agent by +#)8.
This also includes records based on which the debit>credit are effected.
$ll investors have a right to receive their statement of accounts periodically from the )(.
4very month +#)8 forwards statement of account to a random sample of investors as a
counter check.
In the depository, the depository holds the investor accounts on trust. Therefore, if the )(
goes bankrupt the creditors of the )( will have no access to the holdings in the name of
the clients of the )(. These investors can transfer their holdings to an account held with
another )(.
The data interchange between +#)8 and its business partners is protected by protection
measures of international standards such as encryption hardware lock. The protection
measures adopted by +#)8 are more than what is prescribed in the #4BI.
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DEMATERIA8I?ATION @DEMAT
In the advanced countries, depository systems have played a significant role in not
facilitating smooth trading and settlement but also attracting foreign investment in the
capital market. The depository system evolved by the +ational securities depository
limited -+#)8 enables investors to overcome all problems related to handling physical
certificates. +#)8 is an organization formed to provide electronic depository facilities
for securities traded. The securities of investors are held in electronic from through the
medium of depository system.
De!ateriali>ation
/ne of the methods for preventing all the problems that occur with physical securities is
through dematerialization -demat. India has adopted the demat route in which the book
entry is made electronically against securities that are cancelled.
The share certificates are shredded. -i.e., its paper from is destroyed and a corresponding
credit entry of the number of securities -written on the certificates is made in the account
opened with the )epository (articipant -)(.
T&e $ecuritie$ &el" in "e!ateriali>e" 'ro! are 'un)ile, They do not bear any
distinguishable features like distinctive number, folio number or certificate number. /nce
the shares are dematerialized, they lose their identification features in terms of share
certificate distinctive number and folio number. Title to the securities owned is in terms
of number of securities and not in terms of distinctive number, certificates numbers etc.
4ach security is identified in the depository system by I#I+ and short name.
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T&e De!ateriali>ation proce$$=
Investors surrender certificates for dematerialization to depository participant.
)epository participant intimates +#)8 of the re:uest.
)epository submits the certificate to the register.
?egistrar confirms the dematerialization re:uest from +#)8.
+#)8 updates its accounts and informs the depository participant.
)epository participant updates its account and inform the investor.
Note =The entire process of dematerialization may take about 1A days.
Fact Aout De!ateriali>ation
/nly those kind of certificates can be dematerialized which are already listed in ones
name and are in the list if securities admitted for dematerialized at +#)8. This list has
more than C66 companies and is still growing. /ne can get an updated list of these
companies from your )( or from +#)8!s office or from +#)8 website at
www.nsdl.co.in
Before defacing the share certificate, ensure that it is available for dematerialization, one
must therefore check with )epository (articipant whether the I#I+ -'ode number for the
security in a depository system has been activated and made available for
dematerialization by the depository.
If yes, then deface the share certificate. The certificate are defaced by marking.
urrendered for dematerialization* on the face of the certificate.
)ematerialization generally takes about C6 days. If it is not done in C6 days then, then
contact )epository (articipant, otherwise send the grievance to the officer in charge,
investor grievance cell, +ational securities depository limited.
/ne can also dematerialize his debt instrument, mutual fund units and government
securities in a single demat account.
http://www.nsdl.co.in/http://www.nsdl.co.in/ -
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DEPOSITORY
$ depository can be defined as an &institution which transfers the ownership of securities
in electronic mode on behalf of the investor*. $ depository can be compared to a bank.
5ust as the bank holds cash in the account and provide all the services related to
transaction of the cash, a depository also holds securities in electronic form and provides
all services related to transaction of shares. $ depository interacts with client through a
)epository (articipant -)(. With whom the client has to maintain a demat account.
T&ere are t6o "epo$itorie$ in In"ia CDS8 an" NSD8,
'entral depository service -India limited -')#8 is promoted by the stock echange,
"umbai -B#4, Bank of Baroda, Bank of India, #tate Bank of India and H);' Bank.
+ational #ecurities depository limited -+#)8 is promoted by 0nit Trust of India,
Industrial development Bank of India, and national #tock 4change.
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National Securitie$ Depo$itor% 8i!ite" @NDS8=
Intro"uction =
+#)8, the first depository in India, established in $ugust 1223 and promoted by
institutions of national stature responsible for economic development of the country has
since established a national infrastructure of international standard that handles most of
the settlement of securities of securities in dematerialized form in Indian capital market.
Aout NDS8
$lthough India had a vibrant capital market which is more than a century old, the paperD
based settlement of traders caused substantial problems like bad delivery and delayed
transfer of title till recently. The enactment of )epository $ct in $ugust 1223 paved the
way for establishment of +)#8, the first depository in India.
This depository promoted by institutions of national stature responsible for economic
development of the country has since established a national infrastructure of international
standard that handles most of the settlement of securities in dematerialized form in Indian
capital market.
In the depository system, securities are held in depository accounts which is more or less
similar to holding funds in bank accounts, transfer of ownership of securities is done
through simple account transfer. This method does away with all the risks and hassles
normally associated with paperwork. 'onse:uently, the cost of transacting in a
depository environment is considerably lower as compared to transacting in certificates.
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NDS8 Fact$ Fi)ure
A$ on Marc& ;-5 122
+umber of certificates eliminated -$ppo. C2 'rore
+umber of companies in which more than 7AE
shares are dematted
1AC2
$verage number of accounts opened per day since
+ovember 1223
C1A7
(resence of demat account holders in the country 7CE of all pin codes in the country
C&ar)e$=
+)#8, provides depository services to investors and clearing members through market
intermediaries called depository participants -)(s.
+)#8 does not charge the investors and clearing members directly but charges its )(s,
who are free to have their own charge structure for their clients. +#)8 charges to )(s
are uniform for all )(s. #ome klcharges are payable by issuers also.
Central Depo$itor% Ser#ice$ o' In"ia @CDS8
')#8 is the second depository to be granted the commencement certificate by #4BI on F
;ebruary 1222. The Bombay #tock 4change in association with Bank of India, H);',
#tate Bank /f India promotes it. These depositories are interconnected. It is possible to
transfer shares from one depository to another. $n investor can open an account with any
of the depository participant but transfer arising out of trades on the stock echange can
take place only amongst accounts in the two eisting depositories in the country.
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Securitie$ an" Ec&an)e Boar" O' In"ia @SEBI i$ t&e re)ulatin) aut&orit% an" it
)o#ern$ t&e 'unctionin) o' ot& t&e "epo$itorie$,
$ depository interfaces with the investors through its $gents called )epository
participant -)(s. $ )( is authorized to offer depository services to investors.
$ccordingly to #4BI uidelines, financial institutions, Banks, custodians, and stock
brokers etc, can become depository participant in a depository.
/ne can select his )( to open a demat account %ust like selecting a bank for opening a
savings account convenience, comfort and cost can be the three '!s to consider.
$ll the )(s are appointed to fulfillment of uniform re:uirements of #4BI regulations,
1223 and re:uirements of +)#8. However, the type of services offered and the service
standards may differ among various )(s.
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DEPOSITORY PARTICIPANT @DP
$ )( ins investor!s representative in the depository system. It is also the agent of the
depository. It functions as the link between the depository and the beneficial owner of the
securities.
The relationship between depository and the )( will be that of the principal and agent
and their relations will be governed by the byeDlaws of the depository and the agreement
between them.
$ )( is the first point of contact will investor and serves as a link between the investor
and the company through depository in the dematerialization of shares and other
electronic transactions. The main depository players are issuer companies.
)epository participant
Brokers
Ser#ice Pro#i"e" % a Depo$itor% Participant$
;ollowing services can be availed through a )(.
)ematerialization, i.e. converting physical securities into electronic form.
To maintain record of holdings in the electronic form.
#ettlement of offDmarket traders.
(roviding electronic credit in respect of securities allotted by issuers under I(/ or
otherwise.
?eceiving on behalf of )4"$T account holders +on G cash corporate benefits, such as,
allotment of bonus and right shares in electronic form or securities ensuring upon
consolidation, stock split or merger>amalgamation of companies.
(ledging of dematerialized securities.
;acilitating securities lending and borrowing, if the )( is registered as an &approved
intermediary* for the purpose.
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Fee pa%ale % "epo$itor% participant$
Entr% 'ee$=
4ach participants shall pay, to the depository, a non refundable entry fee of ?s.=A666> D
Tran$action relate" 'ee$=
The following transaction related fees shall be payable by the participants to the
depository.
Settle!ent 'ee=
$ settlement fee at the rate of ?s.16 per debit instruction in a clients account shall be
charged to the participant of the client.
$ settlement fee at the rate of ?s.1 per instruction in respect of securities received from
the clearing corporation into the receipt G in account of each clearing member maintained
with the participant sub%ect to a minimum of ?s.1666 and a maimum of ?s.=6666>D per
:uarter per 'm account shall be charged to participant.
Ple")e Fee=
$ fee at the rate of ?s.=A per instruction for creation of pledge>hypothecation shall be
charged to the participant of the (edgor>hypothecator. +o fee shall be charged when a
pledge>hypothecation is closer or invoked.
8en"in) an" orro6in) 'ee$=
$ fee at the rate of ?s.=A per institution shall be charged to the participant of the
borrower in respect of credit of securities to the account of the borrower. +o fee shall be
charged at the time of repayor recall of securities.
Fee 'or "e!ateriali>ation re!ateriali$ation=
+o fees shall be charged by the depository on dematerialization re:uests. However, in
case of rematerialisation re:uest, a flat fee of ?s.166 per certificate shall be charged to
the participant.
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Securit% "epo$it=
4very participant shall pay to the depository ?s.16 lakh by way of interest free
refundable security deposit. However, a clearing corporation or a clearing house of a
stock echange will be eempt from payment of security deposit.
C&ar)e$
C&ar)e$ 'or Account Openin) an" ot&er "epo$itor% relate" tran$action$=
+#)8 charges the )(s and not the investors.
+#)8!s charges to its )(s are fied and are based on the usage of +#)8 system.
The charges that the )( will be charging you for various services are mentioned in the
schedule of charges which forms a part of the account opening agreement.
ou can get the details of the charges from the )(s.
ou can also get a comparative list of )( charges from +#)8!s office or from the +#)8
website.
our )( may revise charges by giving you C6 days notice in advance.
So!e Fact$ aout t&e Account=
/ne can open more than one amount with the same diphtheria is no restriction on the
number of account.
)( may levy nominal charges for opening an account and also for every transaction in
the account. ')#8 and )(s will publish their charges from time to time.
#imilarly, there is no restriction with the number of )(s you can open accounts with.
+o minimum balance is re:uired to be maintained with the )(.
The demat account must be opened in the same ownership pattern in which the securities
are held in the physical from eample, if one share certificate is in your individual name
and another certificate is %ointly held in your and your wife* name, two different account
would have to be opened.
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$nyone can operate demat account on ones behalf if authorized by eecuting a power of
attorney and submitted it to )(.
The charges for closing the account and transferring securities would be as per the
schedule of charges of ones )(, agreed by at the time of account opening or any
subse:uent charges therein.
No!ination
+omination can be made only by individuals holding beneficiary account either singly or
%ointly, nonDindividuals including society, Trust, Body corporate, partnership firm, karta
or Hindu 0ndivided family, holder of power of attorney cannot nominate.
+omination is permitted for account with %oint holders. But in case of death of any of the
%oint holder -#, the securities will be transmitted to the surviving holder -#. only in the
event of )eath of all the 5oint Holders, the securities will be transmitted to the nominee.
Proce"ure o' No!ination=
The nomination form duly filled in should be submitted to the )( either at the time of
account opening or later. The account holder, nominee and two witnesses must sign this
form and the name, address and photograph of the nominee must be submitted.
If nomination was not made at the time of account opening it can be made subse:uently
by submitting the nomination form.
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So!e Fact$ Aout No!ination=
$n +?I can also nominee directly. But the power of attorney holder cannot nominee on
behalf of +?I.
$ minor can be a nominee only when the guardian will sign on his behalf and documents
of guardians are also submitted. But a minor cannot nominate either directly or through
its guardian.
/nly an individual can be a nominee. $ nominee shall not be a society, trust, body
corporate, partnership firm, karta of Hindu undivided family or a power of attorney
holder.
/nly one nominee can be made for one depository account.
+omination can be made account wise not security wise.
+omination can be charged anytime by the account holder># by simply filling up the
nomination form once again and submitting it to the )(.
Tran$!i$$ion
Transmission is the process by which securities of a deceased account holder are
transferred to the account of the surviving %oint holder -#>nominee>legal heirs of the
decreased account holder.
(rocess of transmission in case of dematerialized holding is more convenient as the
transmission formalities for all securities held in $ demat account can be completed by
submitting documents to all )( whereas in case of physical securities the surviving %oint
holder -#>nominee>8egal heirs has to correspond independently with each company in
which shares are held.
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Proce"ure o' Tran$!i$$ion=
In ca$e o' Deat& o' t&e $ole account &ol"er=
In case of death of the sole holder, for the purpose of transmission of securities, the
nominee has to submit a duly filled in transmission form, notarized copy of death
certificate and an affidavit in the prescribed format to the )(. $fter verifying these
documents and if found in order, the )( will transmit the securities to the account of the
nominee.
In ca$e No No!inee i$ !a"e=
In case the sole account holder does not make nomination, the securities would be
transmitted to the account of legal heir -#. $s may be determined by an order of the
competent court. However in cases where the value of securities to be transmitted is less
than ?s.1,66,666>D the )( may process the re:uest based on submission of necessary
letter of indemnity surety, affidavits and +oc documents.
In ca$e o' oint Hol"er$=
In the event of )eath of one of the %oint holders, the securities will be transmitted of the
surviving holder -# on submission form and notarized copy of the death certificate of the
deceased %oint holder to the )(. ;or transmission of securities, the account of the
surviving holder -# must be in the same se:uence in which the names appear in the %oint
account to be closed.
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REMATIA8ISATION
To get back the securities in physical form, all we have to do is to re:uest our )( or
?ematerialization of the same.
?ematerialization! is the term used for converting electronic holdings back into
certificates. The process is carried through )( and the process has to be completed with a
period of C6 days. The investor has to submit a re:uest for remat. The re:uest is
forwarded +#)8 by )(, after verifying that the necessary balance, +#)8 in turn will
intimate the registrar who will print the certificates and dispatch the same to investor.
Investor may or may not be allotted certificates with the same distinctive and certificate
numbers. However, it does not matter really. He will usually be allotted a new folio
number. However, if he already have an eisting folio number, he may be allotted the
same.
THE REMATERIA8ISATION PROCESS
Investor re:uests the )( for rematerialisation
The )( informs to the +#)8.
+#)8 intimate the registrar.
The registrar of the company prints certificate with new number and informs +#)8.
+#)8 ad%usts its accounts and passes on the details to the )(.
The certificated are dispatched to the investor.
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Tra"in) Settle!ent
Proce"ure 'or $ellin) "e!ateriali>e" $ecuritie$=
This procedure is very simple. $fter we have sold securities, we would instruct our )( to
debit our account with the number of securities sold by us and credit our broker!s
clearing account.
This delivery instruction has to be given out to )( using the delivery instruction slips
given to us by our )( at the same of opening the account. (rocedure for selling securities
is given here below9D
We sell securities in any of the stock echange linked to +#)8 through a broker.
We give instruction to our )( to debit our account and credit the BrokerJs accountJ
Before the payDin day, our Broker given instructions to its )( for delivery to clearing
corporationJ
/ur broker receives payment from the stock echange -clearing corporationJ
We receive payment from the broker for the sale of securities.
Proce"ure o' Purc&a$in) De!ateriali>e" Securitie$
;or receiving demat securities we may give a oneDtime standing instruction to our )(.
This standing instruction can be given at the time of account opening or later.
$lternatively, we may choose to give separate receipt instruction every time some
securities are to be received.
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T&e tran$action$ relatin) to purc&a$e o' $ecuritie$ are $u!!ari>e" elo6=
We purchase securities through a BrokerJ
We make payment to out broker who arranges payment to clearing corporation on the
payDin dayJ
/ut broker receive credit of securities it is clearing account -clearing member pool
account on the payDout dayJ
/ut broker given instructions to its )( to debit clearing account and credit out accountJ
We receive shares into our account. However, if standing instructions are not given at
time of opening the account. We will have to give receipt instructions! to our )( for
receiving credit.
We should ensure that our broker transfer the securities from its clearing account to
depository account, before the book closure. If the securities remain in the clearing
account of the broker, the company will give corporate benefits -divided or bonus to the
broker. In that case, we will have to collect the benefits from our broker.
8enders of the securities and the borrowers of the securities enter into separate
agreements with the approved intermediary for lending and borrowing the securities.
8ending and borrowing is effected through the depository system.
So!e Fact$ To Con$i"er=
/ne can lend his securities through intermediaries approved by #4BI.
We may enter into an agreement with the approved intermediary to be a lender under this
scheme. $fter a we may lend securities an time B submitting lending instruction to our
)(.
Intermediary may return the securities at any time or at the end of the agreed period of
lending. Intermediary has to repay the securities together with any benefits received
during the period of the loan.
'orporate benefits accruing on these securities during the period of lending will be given
to the intermediary>recalled, intermediary > borrower will return the securities together
with benefits received.
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?4KI4W
/;
8IT4?$T0?4
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RE:IE7 OF 8ITERATURE
To provide more light on the topic, various research articles and surveys conducted by
various authors are included9
M,S,Arun5 8a+$&!i an" Rajla+$&!i @122
Ta+in) t&e $%$te! 'or a ri"eJ'apital "arket. In this article, authors have studied the
multiple I(/ application scandal that highlights the carelessness and collusion of banks,
investment bankers, and )(!s with market manipulators.
Suc&eta Dalal @122/
De!ateriali$ationJ ='osts, insurance and other issues. #he has founded that although
high dematerialization costs may have retarded through growth of India!s investor
population, things are beginning to change. $ccording to her opinion, it is now up to the
government to encourage the investors to become active players by making the
depository charges affordable.
Ra#i S&a& @1221
E!er)ence o' $ecuritie$ "epo$itorie$ in In"iaJ=
$ccording to Him, &)ematerialization of securities has ended the days of bad deliveries,
payment delays, paper movement and slower settlement.
iten"ra 4u!ar Gupta @122
S%$te! 'ailure or Care'ul !anipulationKJ=
$ccording to him, &I(/ scam has become a big issue for investors and regulators. "ost
consider it to be a manipulation of the system. #4BI and +#)8, the company!s two
depositories, are taking immediate steps to identify the accused people.
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D, Murali @122/
Di$enc&ante" 6it& t&e !ar+etJ
The allD India survey was conducted on household investors to eplore their preferences
and strategies and to find out why retail investors remained disenchanted with the market
&despite tremendous visible progress* such as demat system.
, Ti!e$ Ne6$ Net6or+ @122
Detect !ultiple account$J = In this +ews, ;inance "inister (. 'hidambaram has
promised stringent action to ensure that the demat system is not abused through multiple
accounts and also he has taken up the issue with the regulators to close such loopholes.
3, EP7 E"itorial @122
Spectre o' Bena!i Account$J
It is about the further investigation into the )emat racket first unearthed by the #4BI on
)ecember 1A last year has yielded some startling revelations about the etent to which
market infrastructure is being abused for illicit gains in the primary share market.
Trinat& Ta"a+!alla @122
De!ateriali$ation Securitie$J=
$ccording to author a ma%or weakness in the Indian stock market has been the lack of
depository services on modern lines.
www.yahing.com
&The relevance of the depository services in India to +onDresident Indians*
It throws the light on depository services to +?I!s which removes the inconveniences due
to geographical distances.
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-2, 8,C, Gupta @122
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Depo$itor% Ser#ice$
Pro#i"e"
% Ban+in) Sector
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C&apter II
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ICICI BAN4
O:ER:IE7I'I'I Bank is India!s secondDlargest bank with total assets of about ?s.1373.A2 bn -0#L
CF.A bn at "arch C1,=66A and profit after ta of ?s.=6.6A bn -0#L 31 mn for the year
ended "arch C1,=66A -?s.13.C7 bn -0#L C73 mn in fiscal =66. I'I'I Bank has a
network of about A7C branches and etension counters and over =666 $T"s. I'I'I Bank
offers a wide range of banking products and financial services to corporate and retail
customers through a variety of delivery channels and through its specialized subsidiaries
and affiliates in the areas of investment banking, life and nonDlife insurance, venture
capital and asset management.
I'I'I Bank was originally promoted in 122 by I'I'I 8imited, an Indian financial
institution, and was its whollyDowned subsidiary. I'I'I!s shareholding in I'I'I Bank
was reduced to 3E through a public offering of shares in India in fiscal 122F, an e:uity
offering in the form of $)?s listed on the +#4 in fiscal =666.
In the 1226s, I'I'I transformed its business from a development financial institution
offering only pro%ect finance to a diversified financial services group offering a wide
variety of products and services, both delivery and through a number subsidiaries and
affiliates like I'I'I Bank. In 1222, I'I'I become the first Indian company and the first
bank or financial institution from nonD5apan $sia to be listed on the +#4.
DEMAT SER:ICES
I'I'I Bank )emat #ervices boasts of an everDgrowing customer base of over 11.A lacs
account holders. In our continuous endeavor to offer best of the class services to our
customers we offer the following features.
EIn$truction$= ou can transfer securities = hours a day, 7 days a week through
Internet @ Interactive Koice ?esponse -IK? at a lower cost. +ow with peak to
transfer*, you can also transfer or pledge instruction through our customer care officer.
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Con$oli"ation De!at Account =)ematerialise your physical shares in various holding
patterns and consolidate all such scattered holdings into your primary demat account at
reduced cost.
Di)itall% Si)ne" State!ent=?eceive your account statement and bill by email.
Corporate Bene'it Trac+in) = Track your dividend, interest, bonus through your
account statement.
Moile Re(ue$t =$ccess your demat accout by sending #"# to en:uire about holding,
transactions, Bills @ I#I+ details.
Moile Alert$=?eceive #"# alerts for al debits>credits as well as for any re:uest which
cannot be processed.
)edicated customer care eecutives specially trained at our call centre, to handle all your
:ueries.
'ountrywide network of over =CA branches, you are never far from an I'I'I Bank )emat
#ervices outlet.
Cu$to"ian 'ee
This fee is charged monthly and depends on the number of securities -international
securities identification number DDI#I+ held in the account. It generally ranges between
?s6.A to ?s.1 per I#I+ per month.
)(s will not charge custody fee for I#I+ on which the companies have paid oneDtime
custody charges to the depository.
Transaction fee
The transaction fee is charged for crediting>debiting securities to and from the account on
a monthly basis. While some )(s, such as #BI, charge a flat fee per transaction, H);'
Bank and I'I'I Bank peg the fee to the transaction value, sub%ect to a minimum amount.
The fee also differs based on the kind of transaction -buying or selling. #ome )(s
charge only for debiting the securities while others charge for both. The )(s also charge
if your instruction to buy>sell fails or is re%ected.
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In addition, service ta is also charged by the )(s.
To give an idea, an investor having a daily average trading volume of ?s.3A666>D will be
paying an effective brokerage of 6.A6E only, and that too inclusive of all charges.
)emat account charges9 for all trades done through I'I'I direct.com, there are +/
separate charges. However, for all others traders and services like demat, pledge etc, the
charges shall be as per the eiting rate card of I'I'I demat. $n annual maintenance fee
of ?s.A66>D -?s.A6>D for customers receiving statement by eDmail per account is
charged. However, the first year annual maintenance charges are waived for on all
accounts opened through I'I'I.direct.com.
;or bank account, a minimum :uarterly average balance of ?s.A666>D needs to be
maintained.
7&% to open an account 6it& ICICI "irect,co!K 4ven though they charge 6.FAE,
while the broker may claim only say 6.AE.
;irstly, the brokerage rates of I'I'I direct.com are inclusive of demat transaction
charges, service taes and counter charges for contracted notes.
#econdly, brokerage rates on I'I'I direct.com is dependent on the volume of
transactions done and also the type of trade put in by you. $s mentioned earlier, investors
with reasonable trading volumes anyways get less than 6.AE brokerages -all inclusive.
4ven if we assume very low volumes of trading and that too only on )elivery based
trading, our brokerage rates are still economical. 8et us take an eample.
I'I'I direct /ther broker
+ormal brokerage 6.FAE ma 8ets say 6.A6E
$ Transaction value 16666 16666
B Brokerage -?s. FA.66 A6.66
' #ervices Ta -AE of B +I8 =.A6
) /ther 'harges -6.6CE of $ +I8 C.66
4 )emat 'harges +I8 =A.66
; Total 'harges -?s.
B
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HDFC BAN4
T&e Hou$in) De#elop!ent Finance Corporation 8i!ite" @HDFCwas amongst the
first to receive an in principle! approval from the ?eserve Bank of India -?BI to set up
a bank in the private sector, as part of the ?BI!s liberalization of the Indian Banking
Industry in 122. The bank was incorporated in $ugust 122 in the name of H);' Bank
8imited!, with its registered office in "umbai, India. H);' Bank commenced operations
as a #cheduled 'ommercial Bank in 5anuary 122A.
With practically all trading being conducted electronically, most settlements happen
through )emat -)ematerialisation of securities. The H);' Bank )emat $ccount offers
you a secure and convenient way to keep track of your shares and investments, how much
you!ve bought and sold over a period of time, without the hassle of handling physical
documents that get mutilated or lost in transit.
FEATURES BENEFITS
$s opposed to the earlier form of dealing in physical certificates with delays in
transaction, trading through )emat has the following benefits.
(ledging and Hypothecation of )ematerialised #ecurities.
4lectronic credit in public issue.
?eceipt of nonDcash benefits in electronic form
+o stamp duty on transfer of securities held in demats form.
'hange 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 )(.
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You can open t6o t%pe$ o' "epo$itor% account$
Individual $ccount
'orporate $ccount
De!ateriali>in) Your Securitie$=
If you wish to dematerialize -convert them into electronic form your securities you need
to 9D
C&ec+ 6&et&er t&e $crip i$ a#ailale 'or "e!aterili>ation=
If the scrip is available for dematerialization, then submit the share of certificates along
with a )ematerialisation ?e:uest ;orm -&)?;* duly signed by all the )emat account
holders.
The certificates should be duly cancelled by writing urrendered for )ematerialisation*
on them.
HDFC Ban+ 6ill=
Dverify the signature of all the account holders.
Dverify the names in the )emat account and the certificates
Dforward the certificates to the ?egistrar>'ompany for further processing>credit in your
account.
/nce you get a credit in the account, the scrip will be reflected as free balance in your
demat account statement.
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T%pe o' cu$to!er$ 6&o can open $ecuritie$ tra"in) account$=
$ny Indian resident>+on resident individual -not 0# based or Indian corporate can
register with H);' #ecurities. 'urrently, /'Bs cannot open an account with H);'
#ecurities. To become a registered user of H);' #ec, you will have to first open a
savings>current and demat account with H);' Bank.
Re)i$trationaccount openin) c&ar)e$=
$ccount /pening charges
$ccount opening charges w.e.f. $pril =66A are as follows9
?s.72>D if the customer has an eisting relationship with H);'. -for eample, a car
loan, home loan, credit card, etc. +ecessary proof to be submitted.
?s.722>D if the customer does not have an eisting relationship with H);'.
This is inclusive of legal and documentation charges. This amount will be debited from
the customer!s savings account in the absence of a che:ue.
In addition to opening a trading account with H);' #ecurities 8td. ou will also be
re:uired to open a savings bank account and a )( -depository participant account with
H);' Bank. If you are already availing of these two services from H);' Bank, you
need not open any other savings or demat accounts.
While completing the trading account opening form, you will be prompted to provide
your eisting H);' savings and H);' demat account details -if available to complete
the necessary linkage among these accounts.
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BAN4 CHARGES
In the event that the customer does not have an H);' Bank saving account, he>she will
be obliged to open one with a minimum deposit of ?s.=A66>D. $ :uarterly minimum
balance of ?s.=A66>D will have to be maintained with H);' Bank, as per the H);'
Bank re:uirements.
DP CHARGES
There are no account opening charges. However, the depository participant -)( will
levy an annual maintenance charge as well as transaction charges for each trade.
Proce"ure to eco!e an HDFC $ec cu$to!er=
;irst the customer needs to register with H);'. He can also mail his registration re:uest.
/r the registration can be made on H);'!s site at www.hdfcsec.com.
'ustomer can also register with the bank through their partner web site9
www.hdfcbank.com
If the customer do not already have a savings account or demat account with H);'
Bank, then he will need to open these accounts. They can be opened when he opens his
account with H);' sec.
/nce the documentation is over and the account opening procedure has been successful,
the customer will be intimated by regular mail stating the same along with his account
number, user name and password.
http://www.hdfcsec.com/http://www.hdfcsec.com/http://www.hdfcbank.com/http://www.hdfcbank.com/http://www.hdfcsec.com/http://www.hdfcbank.com/ -
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IDBI BAN4
PROFI8E
ul% -./ =#et up under an $ct of (arliament as a wholly G owned subsidiary of ?eserve
Bank of India.
Feruar% -.3 =/wnership transferred to overnment of India. )esignated (rincipal
;inancial Institution for coDordinating the working of institutions at national and #tate
levels engaged in financing, promoting and developing industry.
April -..2 =#et up #mall Industries )evelopment Bank of India -#I)BI under #I)BI
$ct as a whollyDowned subsidiary to cater to specific needs of smallDscale sector. In
terms of an amendment to #I)BI $ct in #eptember =666, I)BI divested A1E of its
shareholding in #I)BI in favour of banks and other institutions in the first phase. I)BI
has subse:uently divested 72.1CE of its stake in its erstwhile subsidiary to date.
Dece!er -..; = #et up I)BI 'apital "arket #ervices 8td. as a whollyDowned
subsidiary to offer a broad range of financial services, including Bond Trading, 4:uity
Broking, 'lient $sset "anagement and )epository #ervices. I)BI 'apital is currently a
leading (rimary )ealer in the country.
Septe!er -../ =#et up I)BI Bank 8td. in association with #I)BI as a private sectorcommercial bank subsidiary, a se:uel to ?BI!s policy of opening up domestic banking
sector to private participation as part of overall financial sector reforms.
Au)u$t 1222 = Became the first $llDIndia ;inancial Institution to obtain I#/ 266=9122
'ertification for its treasury operations. $lso became the first organization in Indian
financial sector to obtain I#/ 26619=666 'ertification for its fore services.
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Dece!er 122; = /n )ecember 13,=66C the parliament approved The Industrial
)evelopment Bank -Transfer of 0ndertaking and ?epeal Bill =66= to repeal I)BI $ct
123. The (resident!s assent for the same was obtained on )ecember C6, =66C. The
?epeal $ct is aimed at bringing I)BI under the 'ompanies $ct for investing it with the
re:uisite operational fleibility to undertake commercial banking business under the
Banking ?egulation $ct 122 in addition to the business carried on and transacted by it
under the I)BI $ct, 123.
ul% 122/ =The Industrial )evelopment Bank -Transfer of 0ndertaking and ?epeal $ct
=66C came into force from 5uly =, =66.
Septe!er 122/ =+otification for appointed day as /ctober 1, =66, issued by "inistry
of ;inance on #eptember =2, =66.
Octoer 122/ =$ppointed day G /ctober 1, =66D Transfer of undertaking of I)BI to
I)BI 8td. commences operations as a banking company I)BI $ct, 123 stands repealed.
anuar% 122< =The Board of )irectors of I)BI 8td. at its meeting held on 5anuary
=6,=66A approved the #cheme of $malgamation, envisaging merging of I)BI Bank 8td.
with I)BI 8td. (ursuant to the scheme approved by the Boards of both the banks, I)BI
8td. will issue 166 e:uity shares for 1= e:uity shares held by shareholders in I)BI Bank
8td. 4" has been convened on ;ebruary =C, =66A for seeking shareholders approval for
the scheme.
DEMAT ACCOUNT
Electronic Securitie$ Ban+in) =
(aper securities are passM. 4nter the world of dematerialized shares, bonds and other
securities. 'onvert your securities to dematerialized from with I)BI )emat $ccount. It!s
as simple as opening a #aving $ccount.
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7&% De!at 6it& IDBI
8owest fees
#tatement by emails
)emat access through internet, cell and phone
(ortfolio valuation on the account statements
/nline eecution of transactions at branches
#pecial rates for stock market intermediaries and sub brokers
Transactions update from back Goffice four times a day
BENEFITS OF A DEMAT ACCOUNT
With I)BI!s )emat $ccount you can en%oy host of benefits.
De!at Account Ser#ice$ IDBI Ot&er Ban+ DP$
(ortfolio value on $ccount #tatement es +o
)emat #ervices over phone In F locations +o
#tatement on eDmail es +o
/nline 4ecution of instruction es +o
#ervice at all the branches es +o
Kiew of statement on the net es +o
De!at Account$ 'or NRI$
If you are a +onD?esident Indian -+?I who has invested in shares, bonds, debentures of
Indian companies or would like to do so now, open a )emat $ccount with I)BI bank
either under +?I ?epatriable or +?I +onD?epatriable 'ategory. Through bank!s Internet
Banking, you can view your )emat $ccount balances and print statement of transactions
and holdings from anywhere in the world.
UTI BAN4
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0TI Bank was the first of the new private banks to have begun operations in 122, after
the overnment of India allowed new private banks to be established. The Bank was
promoted %ointly by the $dministrator of the specified undertaking of the 0nit Trust of
India -0TID1, 8ife Insurance 'orporation of India -8I' and eneral Insurance
'orporation 8td. and its associates viz. +ational Insurance 'ompany 8td., The +ew India
$ssurance 'ompany, The /riental Insurance 'orporation and 0nited Insurance
'ompany 8td.
The Bank today is capitalized to the etent of ?s. =7F.3= 'rores with the public holding
-other than promoters at 7=.=7E.
The Bank!s ?egistered /ffice is at $hmedabad and its 'entral /ffice is located at
"umbai. (resently the Bank has a very wide network of more than =6 branch offices
and 4tension 'ounters. The Bank has a network of over 1F1 $T"s providing = hrs a
day banking convenience to its customers. This is one of the largest $T" networks in the
country. The Bank has strengths in both retail and corporate banking and is committed to
adopting the best industry practices internationally in order to achieve ecellence.
PROMOTERS
0TI Bank 8td. has been promoted by the largest and the best financial institution of the
country, 0TI. The Bank was set up with a capital of ?s.11A crore, with 0TI contributing
?s.166crore, 8I' G?s.7.A crore and I' and its four subsidiaries contributing ?s.1.A
crore each.
UTI SHAREHO8DING 13,3;L
0TI is the largest mutual fund in India. 0TI presently occupies a special position in
Indian capital market. With a servicing and distribution network of more than AC branch
offices, C=6 'hief ?epresentatives and about 26666 agents, 0TI provides the complete
range of services to its investors.
The account opening charges and the transaction charges of 0TI bank9D
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The table below provides a breakDup of the charges by 0TI Bank )epository.
UTI Depo$itor%
)epository $ccount /pening ?s =66 -0pfront (aymentTransfer>Block #tocks /+8I+4 to
4:uitymaster
+o
Balances Kiewable Through Internet es
+o. of Branches F3
UTI Ban+ De!at Account
'ustomer must enclose one of the following documents -(hotocopies only with the
application form for each $pplicant.
(assport
?ation 'ard
($+ 'ard
Koter!s I) 'ard
Bank $ttestation
0TI Bank charges ?s.=66 towards demat account opening and ?s.=66 towards annual
account maintenance charges. This charge will be debited directly from the customer!s
account.
4OTA4 MAHINDRA BAN4
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O:ER:IE7
4stablished in 12F, The Notak "ahindra group has long been one of India!s most
reputed financial organizations. In ;ebruary =66C, Notak "ahindra ;inance 8td, the
group!s flagship company was given the license to carry on banking business by the
?eserve Bank of India -?BI. This approval creates banking history since Notak
"ahindra ;inance 8td. is the first company in India to convert to a bank.
THE COMP8ETE BAN4
$t Notak "ahindra Bank, we address the entire spectrum of financial needs for
individuals and corporates. ;rom ?etail ;inance to 4:uities, "utual ;unds to 8ife
Insurance and Investment Banking, we have the products, the eperience, the
infrastructure and most importantly the commitment to deliver pragmatic, endDtoDend
solutions that really work.
IN:ESTMENT SER:ICES = O:ER:IE7
$t Notak "ohindra Bank, we recognize that financial needs vary, not %ust amongst
individuals, but across the different stages of your life. We have years of eperience in
helping people put together an investment portfolio that works best for them.
;rom fied deposits to insurance, mutual funds to demat accountsDwe cover it all. What
differentiates us, however, is our emphasis on building enduring relationships. ou!ll
find that at Notak "ahindra Bank, it!s not about selling you many different productsO
it!s about working out a holistic, pragmatic solution that addresses your financial needs.
DEMAT = FEATURES
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They offer streamlined, efficient depository services that allow you to hold your shares in
convenient, &demat* formats and leverage opportunities in the stockDmarket when you
spot them.
T&eir $er#ice inclu"e =
)edicated and trained 'ustomer 'are /fficer to handle and answer all your :ueries.
Highly competitive service charges.
They also cater to the debt re:uirements of companies, including the issue of 'ommercial
(aper, 'ertificate of )eposits, etc. They also provide a composite )emat account that can
hold 4:uity shares as well as overnment #ecurities, Bonds etc.
DEMAT = DOCUMENTATION
In order to open a )emat $ccount, you will need to provide>produce the following
documents
)uly filled 'lient ?elationship ;orm -Individual or 'orporate, )emat $ccount /pening
;orm.
)uly eecuted and stamped )epository (articipant 'lient $greement supplied by the
Bank.
$ photograph of each holder>signatory to be pasted on the form and signed across.
$ copy of (assport>?ation 'ard> Koter!s I) 'ard>Bank attestation for identification.
+omination form -if re:uired
A""itional "ocu!ent$ re(uire" 'or openin) a corporate account$,
'opy of 'ertificate of incorporation.
'opy of certificate of 'ommencement of Business.
"emorandum and $rticles of $ssociation.
Board ?esolution for opening of the )emat $ccount and authorizing the authorized
signatories to operate the )emat account.
A""itional "ocu!ent$ re(uire" 'or HUF accunt$
The H0; accounts can be opened in the name of and operated by the Narta only.
H0; stamp should be affied on all )emat $ccount related documents.
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?4#4$?'H
"4TH/)/8/
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RESEARCH OBECTI:ES
To determine various depository services being administrated by banking )(!s in
'handigarh.
To determine new trends in administration of )( services.
To determine investors and )( perception towards )( services.
To check the growth trends, increasing popularity and awareness of )( #ervices.
RESEARCH METHODO8OGY
?esearch methodology is a way to systematically solve the research problem. The
methodology of study is usually related to the sub%ect or the issue that is being
investigated.
In this, we study the various steps that are generally adopted by a researcher in studying
research problem.
)etermine>define the problem.
#pecify what information is needed.
Identify the sources of information.
ather and process the information.
$nalysis and interpret the information.
(resent the findings.
RESEARCH DESIGN OPTED
In the present research study 4ploratory ?esearch has been undertaken. Hereby, it has
been tried to have a view of &)epository #ervices* given by various banks at 'handigarh.
In a field research personal interviews with the use of the structured :uestionnaire are
conducted to collect the relevant data.
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SOURCES OF DATA
Pri!ar% "ata=
The data was collected from primary sources, for this purpose, a :uestionnaire was
drafted involving various statistical techni:ues in order to increase the accuracy and
efficiency of the research process.
Secon"ar% "ata=
The secondary data is divided into two parts9
Internal data
4ternal data
Internal Secon"ar% Data
Internal data is procured or compiled through depository participants such as depository
accounts, records of investors, record of )emat, record of delivery instructions and
account maintenance etc. also the information about the organizations history etc. have
been taken.
Eternal Secon"ar% Data
4ternal secondary data is generated and collected from events and sources outside the
firms premises such as 'atalogues, )irectories, ;iles and Books etc.
In this pro%ect, among internal sources the organization reports, records
were used to find about depository service administration and among eternal data are
collected from magazines and reports of various surveys in order to have about the
depository services being provided by various Banks, also through Internet #urfing.
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SAMP8ING DESIGN
Sa!plin) Plan =In the present study convenience sampling plan is used.
Sa!plin) Uni#er$e = $ll the residents of 'handigarh city.
Sa!ple Unit =Individuals using depository services of various Banks.
Sa!ple Si>e =In the present study the sample of A6 people holding demat account.
Data Collection Met&o"
)ata about organization profiles of the various Banking )epository (articipants of
'handigarh @ +#)8 and ')#8 is available through the secondary sources.
;or the survey structured :uestionnaires has been used.
Puestionnaire is a list of :uestions given to a number of persons for them to answer. It
secures standardized results that can be tabulated and treated statistically. The
:uestionnaire can be structured or unstructured.
8IMITATION OF STUDY
The result of this research cannot be termed as making a fair representation of the pro%ect.
It was sometimes difficult to obtain data and sometimesDwrong information was provided
by source, which had to be, crosschecked and verified.
)ata collected may be sub%ective due to personal perception of different interviewed.
The )ynamic 4nvironment (revalent in the banks may render the findings to be untrue
and obsolete over a period of time.
athering information from various banks was not easy task as in certain concerns, as the
persons in change were unable to provide much information as they themselves were
overburdened.
COMPARATI:E ANA8YSIS OF IN:ESTORS
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-, 7it& 7&ic& Concern "o %ou &a#e a "e!at AccountK
Tale No, ,-
Option No, o' Re$pon"ent Percenta)e @L
ICICI 7 1AE
HDFC F 13EIDBI = E
UTI 1= =CE
4OTA4 MAHINDRA C 3E
MU8TIPU8E ACCOUNT 13 C=E
ANY OTHER = E
TOTA8 A6
16%
4%
23%
6%
32%
4%
HDFC
IDBI
UTI
KOTAK MAHINDRA
MULTIPLE ACCOUNT
ANY OTHER
Grap& No, ,-
Interpretation=
The ma%or portion in the above pie chart is covered with blue, that consists of &investors
having multiple accounts with multiple banks*, which contributes to C=E of the total
area, followed by 0TI Bank, where about ==E of the investor have opened their demat
account. $fter 0TI bank, H);' bank is on second position, with which 13E of the
investors have opened their demat account, followed by I'I'I bank, which contributes to
13E of the total area. $bout 3E investors have opened their demat account with Notak
"ahindra bank, followed by I)BI bank, which is E. $lso, about E of the investors
have opened their demat account with other banks and companies.
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The above analysis clearly shows that among various )(!s, 0TI is in ;irst position as
compared to that of other )(!s as large number of investors has opened their demat
accounts with this bank.
1, Rea$on$ 'or openin) De!at Account 6it& Speci'ic Ban+
Tale No, ,1
Option$ No, o' Re$pon"ent Percenta)e @L
Pa$t Dealin) 6it& Ban+ 11 ==E
8o6 Maintenance C&ar)e$ = E
Frien"$ Reco!!en"ation 1 =E
Better Ser#ice$ 3 1=EEa$% Acce$$iilit% C 3E
Multiple Rea$on$ =7 AE
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22%
4%
2%
12%
6%
54%
Past Deal!" #t$
Ba!
L Ma!te!a!'e
F(e!)sRe'&**e!)at&!
Bette( +e(,'es
Eas- A''ess.lt-
M/lt0le Reas&!
Grap& No, ,1
Interpretation=
The ma%or portion of the pie chart with blue, &multiple reasons* which contributes to
the AE of the total area, it shows that AE of the investors consider multiple reasons
out of above, while making decision regarding opening of )emat $ccount with the
specific bank. The above analysis clearly shows that ==E of the investors open their
demat account with the specific bank because of past dealing with that bank, followed
by those investors who prefer better services of specific bank, which is 1=E, rather
than any other reason. It also shows that very small number of investors prefer to
open their demat account with the specific bank because of easy accessibility, low
maintenance charges as well as friends recommendations, which is 3E, E and =E
respectively.
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Fre(uenc% o' Tran$action$
Tale No, ,;
Option$ No, o' Re$pon"ent Percenta)e @L
2< ti!e$ in a !ont& =1 =E
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Tale No, ,/
Option$ No, o' Re$pon"ent Percenta)e @L
8e$$ t&an - "a% 6 6E
-1 "a%$ 12 CFE
1< "a%$ =F A3E
More t&an < "a%$ C 3E
3%
56%
6%
12 )a-s
25 )a-s
M&(e t$a! 5 )a-s
Grap& No, ,/
Interpretation=
In the above table, the respondents were asked about the number of days taken by
their depository participants in opening of an account, the responses in the above pie
chart shows that ma%or portion of the chart is covered with A3E, which is =DA days
taken in opening of an account, followed by 1D= days, which CFE. #ome depository
participants take more than A days in opening of an account, which contributes to 3E.
The above analysis clearly indicates that no depository participant opens an account
on the same day. It shows that generally, )(!s take =DA days, which needs to be
improved. There is need for )(!s to make fast processing in opening of an account to
avoid a huge difference between the number of more and less days taken in opening
of an account.
Prole! 6&ile openin) a "e!at Account
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Tale No, ,ation C 3E
Free>eDe'ree>e = E
Tran$po$ition 6 6E
Tele"e!at 7 1E
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Spee"E = E
Multiple Ser#ice$ =C 3E
No Ser#ice$ 1C =3E
6% 4%
14%
4%
46%
26% Re*ate(al7at&!
F(ee7e8De(ee7e
T(a!s0&st&!
Tele)e*at
+0ee)E
M/t0le +e(,'e
N& +e(,'e
Grap& No, ,3
Interpretation=
$s in above, the ma%or portion of the pie chart is covered with brown, &multiple
services*, which contributes to 3E of the total area, followed by &no service*, which
is =3E. This shows that ma%ority of the investors are availing the above services more
than one, and then, it is followed by the investors who have not availed any of the
above service.
The above analysis shows that only 3E of the investors are getting the
?ematerialisation facility from their )(!s which is followed by &investors having
;reeze>)efreeze and #peedD4 facility*, which is E. It also shows that no investor is
availing the facility of Transposition from their )(!s.
A6arene$$ Aout Cu$to"% C&ar)e$
Tale No, ,0
Option$ No, o' Re$pon"ent Percenta)e @L
Ye$ == E
No =F A3E
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44%
56%
Yes
N&
Grap& No, ,0
Interpretation=
In the above table, respondents were asked about their awareness regarding custody
charges by their depository participants. The pie chart indicates that ma%or portion of
the investors, which contributes to A3E of the total area, is not aware about the
custody charges. /nly E of the investors are aware about such charges.
The above analysis shows that there is no huge difference between the aware and
nonDaware investors as there is very little difference between their percentages, but
still there is a need for more information disclosure of such services to the investors.
., To 7&ic& attriute5 %ou pre'er t&e !o$t5 6&ile $electin) DP$K
a Sa'et% Acce$$iilit% c I!a)e
" Co$t Structure e uic+ Settle!ent ' Per$onali>e" Attention,
Tale No, ,.
Option$ No, o' Re$pon"ent Percenta)e @L
Sa'et% 11 ==E
Acce$$iilit% 1A C6E
I!a)e 2 1FE
Co$t Structure 1 =E
uic+ Settle!ent F 13E
Per$onali>e" attention 3 1=E
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22%
3%1%
2%
16%
12%
+aet-
A''ess.lt-
I*a"e
C&st +t(/'t/(e
9/' +ettle*e!t
Pe(s&!l7e) atte!t&!
Interpretation=
In the above analysis, the respondents were asked about the most preferred attribute, they
prefer while selecting )(. The above analysis clearly shows that about C6E of the
investors of the total area, prefers the &accessibility* to be the most important attribute in
making decision regarding the choice of )(, followed by &safety* attribute, which is
==E. ;or some investors, image of )( is more important than any other attribute, which
contributes to 1FE of the total area whereas 13E investors prefer &Puick settlement* to
be the most important attribute. The analysis indicates that only 1=E investors prefer
&personalized attention* and rest =E prefer &cost structure* attribute to be the most
important.
The analysis shows that investors want convenience and therefore, large number of
investors prefer &easy accessibility* to be the most preferred attribute amongst all.
Factor Con$i"ere" in Ma+in) In#e$t!ent Deci$ion
Tale No, ,-2
Option$ No, o' Re$pon"ent Percenta)e @LMa"e % $el' 13 C=E
Gui"e" % Fa!il%
Me!er$
C 3E
Gui"e" % Pro'e$$ional
In#e$t!ent Con$ultant
7 1E
Gui"e" % Ban+er$ FE
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Multiple Factor$ =6 6E
32%
6%
14%%
4%
%%Ma)e .- +el
:/)e) .- Fa*l- Me*.e(s
:/)e) .- P(&ess&!al
I!,est*e!t C&!s/lta!t
:/)e) .- Ba!e(s
M/lt0le Fa't&(s
Grap& No, ,-2
Interpretation=
In the above table, respondents were asked about various factors that they consider whilemaking investment decision. The above graph shows that about 6E of the investors, that
covers the ma%or portion of the total area, consider multiple factors out of above, rather
than taking only one. It is followed by &those persons*, who take investment decision
made by self, which is C=E, and then, &those persons*, who take decision under the
guidance of professional investment consultants, which is then, followed by FE and 3E
of guidance from bankers and family members respectively.
This analysis shows that ma%or portion of investors consider the guidance of all, i.e.
family members, professional investment consultants and their bankers as well as made
decision on their own.
-2, Opinion aout Ser#ice pro#i"e" % Depo$itor% Participant$
Tale No, ,--
Option$ No, o' Re$pon"ent Percenta)e @L
Sati$'ie" CC 33ESo!e 6&at $ati$'ie" 1= =E
Not Sati$'ie" A 16E
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66%
24%
1% %
+atse)
+&*e #$at satse)
N&t satse)
+l'e 4
Grap& No, ,--
Interpretation=
The ma%or portion of the pie chart is covered with blue, &satisfied respondents* which
contributes to 33E of the total area, followed by &somewhat satisfied respondents*,
which is =E, and ¬Dsatisfied respondents*, which is 16E of the total area, with the
depository services provided by their )(!s.
This shows that ma%ority of the people is satisfied with the depository services. This
:uestion was meant to know the perception of various investors towards the depository
services provided by their )(!s.
4EY FINDINGS
;rom my research study I have found out that9D
"a%or portion of investors have multiple accounts and 0TI bank is in first position as
compared to other depository participant.
"ultiple reasons are given for opening demat account with specific bank9D
(ast dealing with bank, low maintenance charges, friends recommendations and better
services.
"ost of the investors get into the transactions mostly fives times in a month.
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Two to five days are taken by the depository participants to open an demat account.
The investors avail multiple services of depository participants9D
?ematerialization, freeze of deDfreeze, tele demat.
"a%or portion of the investors have awareness regarding custody charges charged by
depository participants.
"ultiple factors are considered by investors in making investment decision9D
"ade by self, guided by family members or by professional investment consultant.
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'/+'80#I/+
CONC8USION
The Indian 'apital "arket has been the manual and paper based settlement system but
under the depository system, the clearing and settlement of transactions take place only
with the use of paper work. The system of physical delivery of scripts poses many
problems for purchaser as well as the seller in the form of delayed settlements.
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Thus, to eliminate paper work, facilitate scrip less trading and electronic book entry of
the transfer of securities, it was found necessary to replace the old system of transfer and
settlement with the new and modern system of depositories.
In the advance countries, depository systems have played a significant role in not only
facilitating smooth trading and settlement but also attracting foreign investment in the
capital market.
SUGGESTIONS FOR THE STUDY
)epository services should be more transparent, systematic, and fast.
)epository (articipants should provide more personalized attention to their clients to
attract as well as to epand customer base and satisfaction level.
There is a need to disclose more information regarding )epository services in India so
that people become more aware about such services and it helps in facilitating holding of
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securities in nonDphysical manner for which +#)8 started functioning through various
business partners who include depository participants -)(s.
#4BI should also set up a more Working roups comprising +ational #ecurities
)epository 8td. -+#)8, and various market participants like 'ustodians, Brokers, #tock
4changes and "utual ;unds to assess the progress in dematerialized trading and suggest
further steps.
)epository participants act as a two way link, firstly between the customer and the
company, and secondly as between the customer and the stock echange. #o every )(
should take into consideration that his customers are best taken care off.
4very )( should act as a consultant along with providing epert knowledge to his
customers.
To cater to the convenience of its customers, Bank should continue eploring ways to
epand its reach through strategic arrangements with other institutions.
/ne of the key areas to work is, by upgrading different additional attributes like that of
safety, accessibility, image, cost @ settlement.
4very )( should try to emphasize on personal attention to each customer and also should
try to minimize the time of eecuting delivery of transactions.
4very )( should initiate steps to improve its eisting support systems for retail products
and alternate delivery channels through continued use of technology.
?egular and up to date information is also critical for these competing )epository
(articipants.