About NSDL

NSDL, the first and largest depository in India, established in August 1996 and promoted by institutions of
national stature responsible for economic development of the country has since established a national
infrastructure of international standards that handles most of the securities held and settled in
dematerialised form in the Indian capital market.
Although India had a vibrant capital market which is more than a century old, the paper-based settlement of
trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment
of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India.
This depository promoted by institutions of national stature responsible for economic development of the
country has since established a national infrastructure of international standard that handles most of the
trading and settlement in dematerialised form in Indian capital market.
Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the
capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by
developing settlement solutions that increase efficiency, minimise risk and reduce costs. At NSDL, we play a
quiet but central role in developing products and services that will continue to nurture the growing needs of
the financial services industry.
In the depository system, securities are held in depository accounts, which is more or less similar to holding
funds in bank accounts. Transfer of ownership of securities is done through simple account transfers. This
method does away with all the risks and hassles normally associated with paperwork. Consequently, the cost
of transacting in a depository environment is considerably lower as compared to transacting in certificates

Board of Directors
1

Mr. C.M. Vasudev

Former Secretary, Ministry of Finance

Chairman, Public Interest

Director

Mr. Gagan Rai

National Securities Depository Limited &

Managing Director & CEO

NSDL e-Governance Infrastructure Limited

3

Mr. P. P. Vora

Public Interest Director

Former Chairman & Managing Director

Industrial Development Bank of India Limited (Now, IDBI Bank
Ltd.)
4

Mr. Sudhir Mankad

Public Interest Director

Former Chief Secretary, Government of Gujarat

5

Mr. Ravi Narain

Shareholder Director

Vice Chairman
National Stock Exchange of India Limited
6

Mr. R.K. Bansal

Executive Director, IDBI Bank Limited

Mr. B. Babu Rao

President
The Specified Undertaking of the Unit Trust of India (SUUTI)

Shareholder Director

Shareholder

Promoters / Shareholders
NSDL is promoted by Industrial Development Bank of India (IDBI) - the largest development bank of India,
Unit Trust of India (UTI) - the largest mutual fund in India and National Stock Exchange (NSE) - the largest
stock exchange in India. Some of the prominent banks in the country have taken a stake in NSDL.

Promoters

Industrial Development Bank of India Limited (Now, IDBI Bank Limited)

Unit Trust of India (Now, Adminstrator of the Specified Undertaking of the Unit Trust of India)

National Stock Exchange of India Limited

Other Shareholders

State Bank of India

HDFC Bank Limited

Deutsche Bank A.G.

Axis Bank Limited

Citibank N.A.

Standard Chartered Bank

The Hongkong and Shanghai Banking Corporation Limited

Oriental Bank of Commerce

Union Bank of India

Dena Bank

Canara Bank

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Legal Framework
As a part of its on-going market reforms, the Government of India promulgated the Depositories Ordinance in
September 1995. Based on this ordinance, Securities and Exchange Board of India (SEBI) notified
its Depositories and Participants Regulations in May 1996. The enactment of the Depositories
Act the following August paved the way for the launch of National Securities Depository Ltd.(NSDL) in

November 1996.The Depositories Act has provided dematerialisation route to book entry based transfer of
securities and settlement of securities trade.
In exercise of the rights conferred by the Depositories Act, NSDL framed its ByeLaws and Business
Rules. The ByeLaws are approved by SEBI. While the ByeLaws define the scope of the functioning of NSDL
and its business partners; the Business Rules outline the operational procedures to be followed by NSDL and
its Business Partners.
In view of the SEBI (Depositories and Participants) (Amendment) Regulations, 2012, NSDL has adopted Code
of Conduct for its Directors and Code of Ethics for its Directors and Key Management Personnel as
prescribed under Regulation 9D of the aforesaid regulations. The Code of Ethics for Directors and Key
Management Personnel of NSDL, is aimed at improving the professional and ethical standards in the
functioning of the company thereby creating better investor confidence in the integrity of the market.

Depository System - Business Partners

NSDL carries out its activities through various functionaries called "Business Partners" who include
Depository Participants (DPs), Issuing companies and their Registrars and Share Transfer Agents, Clearing
corporations/ Clearing Houses of Stock Exchanges. NSDL is electronically linked to each of these business
partners via a satellite link through Very Small Aperture Terminals (IPVSAT) or through MPLS (Multi protocol
label switching). The entire integrated system (including the electronic links and the software at NSDL and
each business partner's end) is called the "NEST" [National Electronic Settlement & Transfer] system.

Depository Participant (DP)

The investor obtains Depository Services through a DP of NSDL. A DP can be a bank, financial institution, a
custodian, a broker, or any entity eligible as per SEBI (Depositories and Participants) Regulations, 1996. The
SEBI regulations and NSDL bye laws also lay down the criteria for any of these categories to become a DP.
Just as one opens a bank account in order to avail of the services of a bank, an investor opens a depository
account with a DP in order to avail of depository facilities. Though NSDL commenced operations with just
three DPs, Depository Participant Services are now available in most of the major cities and towns across the
country.

Issuing Companies / their Registrar & Transfer Agents

Securities issued by issuers who have entered into an agreement with NSDL can be dematerialised in the
NSDL depository. As per this agreement, issuer agrees to verify the certificates submitted for
dematerialisation before they are dematerialised and to maintain electronic connectivity with NSDL.

Electronic connectivity facilitates dematerialisation, rematerialisation, daily reconciliation and corporate

actions.

Clearing Corporation / House

The clearing corporations/houses of stock exchanges also have to be electronically linked to the depository in
order to facilitate the settlement of the trades done on the stock exchanges for dematerialised shares. At
present, all the major clearing corporations/houses of stock exchanges are electronically connected to NSDL.

The following stock exchanges have linked up with NSDL to facilitate trading and
settlement of dematerialised securities :

Madras Stock Exchange Ltd. (MSE)

National Stock Exchange of India Ltd. (NSE)

Inter-connected Stock Exchange of India Ltd. (ISE)

OTC Exchange of India (OTCEI)

The Calcutta Stock Exchange Association Ltd. (CSE)

The Delhi Stock Exchange Association Ltd. (DSE)

The Stock Exchange, Mumbai (BSE)

The Stock Exchange, Ahmedabad (ASE)