Depositories, DPs and Registrars
A Depository holds securities in electronic (dematerialised) form — India has two: NSDL (1996) and CDSL (1999). Depository Participants (DPs) are the retail-fac...
The Demat Infrastructure
A Depository holds securities in electronic (dematerialised) form — India has two: NSDL (1996) and CDSL (1999). Depository Participants (DPs) are the retail-facing interface (e.g., Zerodha DP, HDFC Securities DP). A Registrar & Transfer Agent (RTA) maintains the investor register for a company or mutual fund (e.g., KFintech, CAMS).
When you buy a share, it is credited to your demat account at a DP, which maintains records in one of two depositories (NSDL or CDSL). The depository doesn't itself interact with retail — DPs do. The RTA maintains the issuer's share register, processes corporate actions (bonus, dividend, buyback), handles IPO allotments, and updates the depository. NSDL + CDSL are SEBI-regulated; DPs are registered with both SEBI and the depository. RTAs are separately SEBI-registered. The 2019 mandate requires all listed securities to be in dematerialised form — paper shares can't be traded.
Holds your securities electronically
Your retail interface — Zerodha, HDFC Sec DP
Maintains shareholder list, handles corporate actions
NSDL and CDSL are interoperable
A Practical Example
Priya buys 100 Reliance shares via Zerodha:
• Trade matched on NSE
• NSCCL clears; on T+1 (pay-out day), 100 RIL credited to her Zerodha DP account in CDSL (Zerodha uses CDSL)
• RIL's RTA (KFintech) receives a daily file from CDSL listing new shareholders
• Come dividend record date, KFintech passes the list to RIL, which credits dividend to each holder's bank via NACH
Four entities touch Priya's trade: Zerodha (broker + DP), NSE, CDSL, KFintech (RTA) — each SEBI-registered with defined responsibilities.
What Makes This Important
Frequently Asked Questions
The RTA fetches the beneficiary list from the depository on record date. It then instructs the company's bank to credit dividends (via NACH / NEFT) directly to the registered bank account of each holder. No physical cheques for listed securities.
🧠 Quick Quiz
2 questions to check your understanding