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Markets & Regulators

Depositories: NSDL and CDSL

India's two securities depositories, which hold shares and bonds in electronic (demat) form; exams ask about the Depositories Act, 1996, their promoters, depository participants and the CAS.

Pareto Academy · updated 26 October 2026

At a glance

A depository holds investors' securities in electronic form, much as a bank holds money. India has two: National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Investors deal with them through depository participants (DPs) such as banks and brokers, and every trade on an exchange is settled by moving securities between demat accounts.

Key facts

  • Law: Depositories Act, 1996
  • Regulator: SEBI (SEBI (Depositories and Participants) Regulations)
  • NSDL: set up 1996, India's first depository; promoted by IDBI, UTI and NSE; HQ Mumbai
  • CDSL: set up 1999; promoted by BSE; HQ Mumbai
  • Listing: CDSL listed on NSE in 2017; NSDL listed on BSE in August 2025
  • Intermediary: depository participant (DP), registered with SEBI
  • Account: beneficial owner (BO) or demat account
  • Statement: Consolidated Account Statement (CAS), sent by depositories
  • Settlement cycle: T+1 for equities

How it works

  • Dematerialisation: paper certificates are converted to electronic holdings; rematerialisation is the reverse.
  • The investor opens a demat account with a DP, which is linked to either NSDL or CDSL. The depository keeps the master record; the DP is the front office.
  • When shares are sold, the clearing corporation moves them out of the seller's demat account and into the buyer's.
  • CAS: a single monthly statement showing a person's holdings across demat accounts and mutual fund folios, identified by PAN.
  • Depositories also keep data on FPI investments, which is why monthly FPI flow figures are "depository data".
NSDL CDSL
Started 1996 1999
Promoter IDBI, UTI, NSE BSE
Strength Higher value of holdings, institutional clients More demat accounts, retail-heavy

Recent developments

  • 26 Oct 2026: Depository data showed net FPI sales of about ₹48,056 crore in Indian equities so far in October, taking 2026 outflows to about ₹3.08 lakh crore, the highest for any year.
  • 07 Oct 2026: The RBI said SEBI-regulated depositories will be able to include bank deposit details in their CAS through Account Aggregators, so demat holders can see deposits and securities in one place, by 31 December 2026.

Exam traps

  • NSDL is promoted by NSE (with IDBI and UTI); CDSL is promoted by BSE.
  • The Depositories Act is from 1996, the same year NSDL started; CDSL came in 1999.
  • A DP is an agent of the depository, not a depository itself.
  • Depositories are regulated by SEBI, not the RBI.
  • Demat holding is compulsory for trading on exchanges; physical shares cannot be transferred (except transmission).

Quick check

  • Q: Under which Act do depositories operate? A: The Depositories Act, 1996.
  • Q: Which exchange promoted CDSL? A: BSE.
  • Q: What is the single statement of all holdings called? A: The Consolidated Account Statement (CAS).

Further reading

Sources

In the news

Every time this topic has appeared in our current affairs, newest first:

  1. 26 October 2026FPIs pull about ₹48,000 crore from Indian equities in October
  2. Week of 1–7 October 2026Account Aggregators made interoperable; bank deposits to appear in the depositories' CAS