Difference Between NSDL and CDSL
- 4m0•
- 10 Sep 2023
Investing in the stock market is a prudent way to grow wealth. In India, the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) play crucial roles in facilitating these investments. While both NSDL and CDSL are depositories, they have distinct features and functions.
What is NSDL?
National Securities Depository Limited, commonly known as NSDL, stands as India's pioneering and most extensive depository. NSDL provides various electronic shareholding services, streamlining securities management by eliminating the necessity for physical share certificates. This advancement greatly enhances the efficiency, security, and overall convenience of securities holding and trading for investors.
What is CDSL?
Central Depository Services Limited (CDSL) is an Indian depository specializing in electronic securities holding. It extends a comprehensive suite of services, encompassing account initiation, dematerialization, rematerialization, trade settlement, and an array of supplementary offerings, catering to investors through its network of depository participants. CDSL is one of India's two principal depositories alongside the NSDL.
Difference Between NSDL and CDSL
The table below captures key differences between NSDL and CDSL on certain parameters:
Parameters
Establishment
NSDL
NSDL was established in 1996 and is promoted by financial institutions, like IDBI Bank and the National Stock Exchange of India Ltd. (NSE).
CDSL was founded in 1999 and is promoted by the Bombay Stock Exchange (BSE) and several leading banks.
Parameters
Services Offered
NSDL
NSDL primarily offers dematerialization services, allowing you to convert your share certificates in physical format into electronic format. It also provides account maintenance services, such as updating investor details and nominee registration..
CDSL offers services similar to NSDL, including dematerialization and account maintenance. Additionally, CDSL offers facilities for pledge and hypothecation of securities.
Parameters
Demat Account Format
NSDL
NSDL comprises 14 numerical digits and commences with the prefix 'IN.'
A unique 16-digit numerical code identifies CDSL Demat accounts.
Parameters
Number of Depository Participants
NSDL
As of July 31, 2023, NSDL had 284 DPs.
As of July 31, 2023, CDSL had 588 DPs.
| Parameters | NSDL | CDSL |
|---|---|---|
| Establishment | NSDL was established in 1996 and is promoted by financial institutions, like IDBI Bank and the National Stock Exchange of India Ltd. (NSE). | CDSL was founded in 1999 and is promoted by the Bombay Stock Exchange (BSE) and several leading banks. |
| Services Offered | NSDL primarily offers dematerialization services, allowing you to convert your share certificates in physical format into electronic format. It also provides account maintenance services, such as updating investor details and nominee registration.. | CDSL offers services similar to NSDL, including dematerialization and account maintenance. Additionally, CDSL offers facilities for pledge and hypothecation of securities. |
| Demat Account Format | NSDL comprises 14 numerical digits and commences with the prefix 'IN.' | A unique 16-digit numerical code identifies CDSL Demat accounts. |
| Number of Depository Participants | As of July 31, 2023, NSDL had 284 DPs. | As of July 31, 2023, CDSL had 588 DPs. |
NSDL vs CDSL - Which is Better?
As highlighted earlier, apart from their operational regions, there isn't a significant distinction between CDSL and NSDL. Both depositories are authorized by the Indian Government, subject to SEBI oversight, and provide identical services to investors who hold electronic versions of their securities. From an investor's standpoint, these services are interchangeable. Therefore, the choice between them ultimately depends on which stock exchange one primarily focuses on for their trading activities.
Neither NSDL nor CDSL is definitively better than the other. Your choice should be based on your specific requirements and priorities as an investor or trader. It's also important to remember that your direct interaction will likely be with the DP, so thoroughly researching and evaluating DPs associated with each depository is essential in making an informed decision. Ultimately, both NSDL and CDSL contribute to the efficiency and development of the Indian securities market.
NSDL And CDSL Difference - FAQs
Certainly, it is possible to move shares from an NSDL Demat account to a CDSL Demat account. This process is referred to as an inter-depository transfer. To initiate the transfer, you should contact your stock broker, who manages your NSDL demat account.
As of July 31, 2023, active client accounts with NSDL stood at 3,27,63,591.
As of July 31, 2023, CDSL had 9,07,31,547 investor accounts.
