CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited) are both depositories in India that hold securities such as shares and debentures on behalf of investors in an electronic format. They are responsible for maintaining records of transactions in securities and ensuring the efficient and smooth functioning of the securities market in India.
CDSL and NSDL are the two depositories that are authorized by the Securities and Exchange Board of India (SEBI) to provide depository services in India. They act as intermediaries between the companies issuing securities and the investors who hold those securities.
Both CDSL and NSDL hold securities in dematerialized (electronic) form, which means that physical share certificates are no longer issued or traded. Instead, securities are held electronically in an investor’s account with the depository. This makes the process of buying and selling shares much faster and more efficient, and reduces the risk of fraud or errors.
Both CDSL and NSDL also provide services such as transfer of securities, pledge of securities and nominee services, it’s important to note that the different companies are registered with either CDSL or NSDL. To trade in shares of a particular company, you will have to hold an account with the depository where that company is registered.