NSDL and CDSL are two major depositories in India that offer electronic securities depository services to investors. A depository is an institution that holds securities such as shares, bonds, and mutual fund units in electronic form. This article will discuss the key differences between NSDL and CDSL.

Difference between NSDL and CDSL

1. Establishment and Ownership

National Securities Depository Limited (NSDL) was established in 1996 and is the first depository in India. It is promoted by the National Stock Exchange (NSE) and the Industrial Development Bank of India (IDBI).

Central Depository Services Limited (CDSL) was established in 1999, three years after NSDL. It is promoted by BSE (Bombay Stock Exchange), Bank of India, Bank of Baroda, and HDFC Bank.

2. Market Share

NSDL is the largest depository in India in terms of market share. It holds about 86% of the market share of the total value of securities held in depositories in India. CDSL holds the remaining 14% of the market share.

3. Services Offered

Both NSDL and CDSL offer similar services, including account opening, dematerialization, rematerialization, transfer, and pledging of securities. However, there are some differences in the way they offer these services.

NSDL offers a wider range of services than CDSL. It offers facilities such as e-voting, a facility for investors to cast their votes electronically, and a facility for holding mutual fund units in dematerialized form. NSDL also offers the e-Insurance Account (eIA) facility, allowing investors to hold their insurance policies electronically.

CDSL, on the other hand, offers a facility for holding electronic gold bonds, which are government securities denominated in grams of gold. It also offers a facility for the e-locker, allowing investors to store their important documents electronically.

4. Charges

Both NSDL and CDSL charge fees for the services they offer. However, the charges may differ for some services.

For example, the account opening charges for NSDL and CDSL are the same. However, the charges for rematerialization (converting electronic securities into physical form) are different. NSDL charges Rs. 25 per certificate, while CDSL charges Rs. 50 per certificate.

Similarly, the annual maintenance charges (AMC) for maintaining a demat account are also different for NSDL and CDSL. NSDL charges a flat fee of Rs. 300 per year, while CDSL charges a variable fee based on the value of securities held in the demat account.

5. Technology

Both NSDL and CDSL use state-of-the-art technology for their depository services. However, NSDL is known for its robust and reliable technology platform, which has won several awards.

NSDL also offers a facility for online document submission, making the account opening process faster and more convenient. CDSL, on the other hand, does not offer this facility yet.

6. Reach

Both NSDL and CDSL have a wide reach across India. However, NSDL has a slightly wider reach than CDSL. NSDL has over 2,000 depository participants (DPs) spread across more than 3,000 locations in India. CDSL has over 500 DPs spread across more than 1,000 locations in India.

Conclusion

Both NSDL and CDSL are leading depositories in India that offer electronic securities depository services to investors. While NSDL has a larger market share and a wider range of services, CDSL offers some unique services such as holding electronic gold bonds and the e-locker facility.