Almost every investor has heard of the terms "NSDL" and "CDSL." When opening a Demat account, these words are frequently mentioned by the stock broker.
National Securities Depository Limited
NSDL was Founded in the year 1996. IDBI Bank, UTI & NSE are promoters of the company. It has total Demat accounts around 2,32,92,945.
Central Depository Securities Limited
CDSL was Founded in the year 1999. SBI, HDFC Bank & BSE are promoters of the company. It has total Demat accounts around 2,32,92,945.
CDSL and NSDL are working in same industry which is also having monopoly of both of these companies.
In principle, both NSDL and CDSL act as banks for stockholders. Instead of funds, they keep bonds, stocks, investment products, and other assets.
Handling financial stuff in their physical form created numerous risks. They offer a digital locker for holding their financial assets.
An investor has no control in which depository their Demat account will be opened with. This decision is made by the investor's stockbroker.
Broker can credit or debit stocks from either of these depositories on behalf of its clients if they have valid authority granted to them by an attorney to do so.