NSDL (National security Depository Ltd) and CDSL (Central Depository service Ltd) play an important role in the Indian stock market today. They are promoted mainly by NSE and BSE respectively, provide depository service for electronic trading of securities both equity and debt.
These two depositories maintain details of shares and debt instruments in electronic format after dematerialization. The basic activities of these two organization may be compared to that of banks .Just as banks maintains cash deposits and provide all services relating to the electronic settlement of trading in shares and debt instrument. Change of ownership of shares and debenture following buying and selling of these instrument in stock exchanges are reflected in the electronic database maintained by these two depositories.
The depositories also provide many services .Appropriate electronic crediting of securities to investors demat accounts after a public issue, right issue, bonus issue or stock splits are also done through them. They also facilitate the purchase and sale of units of mutual fund.
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