The DP is an organisation that functions as an intermediary between you and the depository. All DPs are registered with the capital markets regulator—the Securities and Exchange Board of India (SEBI). They offer depository-related services to clients. Your bank could also be your DP.
Meanwhile, depositories are organisations that hold your shares, bonds, mutual funds, and other securities. There are two depositories functioning in India at present. These are Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL). CDSL is run by the Bombay Stock Exchange, Bank of India, Bank of Baroda, State Bank of India, and HDFC Bank. NSDL is promoted by Unit Trust of India, IDBI, and the National Stock Exchange.
Opening a demat account is a prerequisite for buying and selling equity shares in the National Stock Exchange and the Bombay Stock Exchange. While opening the account, you may have noticed that a 16-digit DP account number is issued against your name. For all references, this is the number that is quoted.
Read more: What is collateral amount in demat account?
Your demat account number has quite a few details embedded in it. You may be surprised to learn that the series of digits has been assigned to your name to serve specific purposes. For instance, the first eight digits of your depository participant identity (DP ID) is the identity of your demat service provider. The remaining eight digits are the beneficiary identity. The combination of the two is your unique demat ID. The demat ID is also referred to as the beneficiary ID. This is very similar to the bank codes such as IFSC and MICR which identify your bank along with you as a customer.
If your depository is CDSL, all 16 digits in your DP account are the number. This is your DP ID. On the other hand, if your depository is NSDL, the first two digits are alpha (code) while the remaining 14 digits are the DP number.
The DP ID can be summed up as:
DP ID + Beneficiary ID = Demat ID
For example, consider the CDSL demat account number 1234567891234567.
Here, the first eight digits (12345678) are the DP ID. The remaining eight digits (91234567) represent the beneficiary ID or client ID.
On the other hand, the NSDL demat account number will look like this: IN34567891234567. The first two letters are the identity of your country, which is India. The country code along with the next six digits is the DP ID. Therefore, IN345678 is the DP ID while 91234567 is the client ID or beneficiary ID.
Read more: What is client ID in demat account?
Your demat account is not merely a set of numbers. It has been assigned in such a way that your depository participant and you as its client can be easily identified. The two depositories—NSDL and CDSL—use the DP as an intermediary. It is important to understand what constitutes DP ID and why it is used. Put simply, the DP ID is a subset of your unique demat account number.
If you are confused what is DP ID in your demat account, be assured that it has nothing to do with you. It has been assigned to the DP with whom you have the demat account. A demat account number, on the other hand, is your unique individual ID that is assigned to you by the DP.
Read more: Informative report on demat account
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