InvestorQ : What is the difference between CDSL and NSDL?
Neelam Naik made post

What is the difference between CDSL and NSDL?

Answer
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Anu Biswas answered.
2 years ago


NSDL and CDSL are both central depositories which hold various securities like money, property, etc. in an electronic form. NSDL stands for ‘National Securities Depository’, whereas CDSL stands for ‘Central Depository Securities’ Limited. They both are depositories that hold various securities like shares in electronic form. There is no major difference between the two; however, there is a small difference in their charges and their source of work. While NSDL has larger AUM, both have an almost equal number of demat accounts.
A depository is an organization that holds securities of investors in an electronic format at the request of an investor through a registered Depository Participant. You cannot directly open an account with the depository but only with depository participants (known as DPs). Depository assists in the allotment and transfer of securities and securities lending. In a depository, securities such as bonds, shares, and ETFs are kept for safekeeping. The securities are held in the form of electronic accounts. They carry out their various operations through functionaries called as business partners or a Depository Participant. This system is governed under the Depositories Act by the government.
National Securities Depository Limited (NSDL) was the first depository in India. It is promoted by institutions of national stature, which are responsible for the economic development of India and have established an infrastructure of international standards. They handle most of the securities, which are held and settled in a dematerialized form in the Indian capital market. Its main promoters are IDBI, UTI, and NSE. This background and pedigree make NSDL a sound and secure institution to maintain your securities in safe custody. Central Depository Services Limited (CDSL) is the second Indian central securities depository. Its main promoters are BSE, HDFC, SBI, BOI, and BOB. Both the NSDL and CDSL are backed by institutions of repute and that is where you share actually reside. Your DP only works as the representative partners of the two DPs. You can open your demat account either with NSDL or with CDSL.