Difference between NSDL & CDSL – Meaning, Full Form, Charges & More

NSDL vs CDSL - Difference between NSDL & CDSL

To understand the Difference between NSDL and CDSL, you need to first learn what are NSDL and CDSL.

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Content:

What are NSDL and CDSL

Before the introduction of the Demat Account, if you bought shares in the stock market, you would receive physical shares in the form of share certificates. Transferring and storage of physical share certificates was quite risky and would sometimes result in loss or damage. Hence the Depositories were introduced to help store the shares in electronic form.

NSDL and CDSL are the depositories in India that help you store the shares electronically. Depositories are companies that provide Demat Services to the Stock Brokers. Every Stock Broker is registered with NSDL or CDSL or Both and is called a Depository Participant.

Both NSDL and CDSL are SEBI Registered entities and they not just help in storing the Shares in Dematerialized form but also other financial instruments such as:

  • Debentures
  • Bonds
  • Exchange-traded Funds (ETFs)
  • Mutual Funds
  • Government Securities (GSecs) 
  • Treasury Bills (T-bills) etc.

NSDL Full Form and Meaning

NSDL stands for National Securities Depository Limited, it is the oldest depository in India with over 2 crore Demat Accounts under its belt. NSDL is promoted by some of the largest financial institutions in India namely, IDBI Bank, UTI, and the National Stock Exchange (NSE). NSDL has its presence in approximately 1,900 cities/towns in India with over 26,000 service centers. 

Role of NSDL

NSDL helps its clients by providing services like:

  • Trade Settlements in just 2 working days (i.e. once you buy the shares in the stock market, you will receive them in your Demat Account in 2 working days).
  • Dematerialization (Conversion of physical share certificates in the electronic form).
  • Rematerilization (Conversion of electronic share certificates in the physical form).
  • Maintenance of Demat Account.
  • Transfer of Corporate benefits like Rights and Bonuses directly into the accounts electronically.
  • Periodic Status Reports to investors on the holdings and transactions.
  • Account Statements for ease of portfolio monitoring.

CDSL Full Form and Meaning

CDSL stands for Central Depository Services Limited, it was established in 1999 and handles over 2.78 crore investor accounts. CDSL is promoted by the Bombay Stock Exchange (BSE). HDFC Bank, Standard Chartered Bank, and Canara Bank also have a stake in CDSL. It has its presence in 120 cities/towns with 222 branches. On 30th June 2017, CDSL was listed on NSE and became the first depository to be listed in the Asia – Pacific Region.

Role of CDSL

All the services provided by CDSL are similar to NSDL like:

  • Trade Settlement
  • Dematerialization 
  • Rematerialization 
  • Demat Account Maintenance
  • Periodic Status Reports 
  • Account Statements etc.

NSDL & CDSL Charges

As NSDL & CDSL provide their services to investors via Depository Participants (Stock Brokers), they do not charge the investors directly. Depository Participants charge the investors and can have their own fee structure.

So the charges shall vary depending on the Depository Participant you choose. 

NSDL vs CDSL

Both CDSL and NSDL offer similar services and it doesn’t make any difference to the investor if he chooses either of the depositories. In fact, the investors do not have the option of choice, it is the depository participants or stockbrokers that choose the depositories depending on the ease of service and charges. 

Parameter NSDL CDSL
Full Form National Securities Depository Limited Central Depository Services Limited
Incorporation 1996 1999
Headquarters Mumbai, India. Mumbai, India.
Exchange National Stock Exchange Bombay Stock Exchange
Accounts NSDL number of Demat Accounts: 2,07,23,115 (as on 30 Nov 2020) CDSL number of Demat Accounts: 2,54,64,525 (as on 30 Aug 2020)
Number of Depository Participants 278 594

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