InvestorQ : My DP account is for holding shares. Why are they asking my bank account details?
Sam Eswaran made post

My DP account is for holding shares. Why are they asking my bank account details?

Answer
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Riya Dwivedi answered.
2 years ago


Don’t worry; this is just to protect your interest. Bank account details are mandated by SEBI for the protection of the interest of investors. When any cash or non-cash corporate benefits such as rights or bonus or dividend is announced for a particular scrip, depositories provide to the concerned issuer /it’s RTA, the details of the investors, their electronic holdings as on record/book closure date for reckoning the entitlement of corporate benefit. The disbursement of cash benefits such as dividend is credited directly by the Issuer/it’s RTA to the beneficiary owner through the ECS (Electronic Clearing Service wherever available) facility or by issuing warrants on which bank account details are printed for places where ECS facility is not available. The bank account number is mentioned on the dividend and warrant to avoid any fraudulent misuse. The bank account mandate details will be mentioned in account opening form or modified details that had been intimated subsequently by the investor to the DP.
There is one more point here. If you change your bank account and if that is the account mapped to your DP account then ensure to immediately intimate your DP. That is your responsibility. The investor must inform the DP regarding a change in the bank account and a corresponding change in the MICR / IFSC code while updating their bank account details with DP. In the depository system, monetary benefits on the security balances are paid as per the bank account details provided by the investor at the time of account opening. The investor must ensure that any subsequent changes in bank account details are informed to the DP. You are required to furnish a letter with a canceled copy of the cheque for the records of the DP.