NSDL stand for National Securities Depository Limited; it is the oldest depository in India with over 2 crore Demat Accounts under its belt. CDSL stands for Central Depository Services Limited; it was established in 1999 and handles over 2.78 crore investor accounts.
Read the article below to understand the difference between NSDL and CDSL.
Let’s get started!
Content:
- What is NSDL and CDSL?
- NSDL Full Form and Meaning
- Role of NSDL
- CDSL Full Form and Meaning
- Role of CDSL
- NSDL & CDSL Charges
- NSDL vs CDSL
- Quick Summary
- FAQ(Frequently Asked Questions)
What is 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 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 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.
To understand them better, we suggest you keep reading and find the difference between NSDL and CDSL in the next sections of the article.
NSDL Full Form and Meaning
NSDL stand 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 a 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.
Still confused? Read this blog on Depository Participant.
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.
Read this blog to find out the Depository Participant Charges.
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 stock brokers that choose the depositories depending on the ease of service and charges.
Now let’s have a look at the difference between CDSL and NSDL.
| 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 |
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, and hence we bring you the important topics and areas that you should know:
Quick Summary
- NSDL and CDSL are the depositories in India that help you store the shares electronically. 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.
- National Securities Depository Limited (NSDL) is India’s oldest depository with over 2 crore Demat Accounts. NSDL is backed by IDBI Bank, UTI, and the National Stock Exchange (NSE). NSDL has about 26,000 service centers in around 1,900 Indian cities/towns.
- Central Depository Services Limited (CDSL) was founded in 1999 and currently manages over 2.78 crore investor accounts. The BSE promotes CDSL (BSE). CDSL is owned by HDFC, Standard Chartered, and Canara Bank. It has 222 branches in 120 cities/towns. On June 30, 2017, CDSL became the first Asian-Pacific depository to be listed on the NSE.
- 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.
FAQ(Frequently Asked Questions)
1. Which Is Bigger NSDL Or CDSL?
Technically CDSL handles more number of demat accounts compared to NSDL, but NSDL is the oldest among the two with more number of service centers.
2. How Do I Know If I Have NSDL Or CDSL?
It is quite simple to find out which depository handles your demat account. If it is CDSL, the demat account number will have 16 numeric digits. If it is NSDL, the demat account number will start with IN followed by 14 numeric digits.
3. Is NSDL a Govt Company?
Yes, both NSDL and CDSL are government bodies regulated by SEBI.
