National Securities Depository Limited (NSDL)

Investing in the stock market is one of the most popular options among people who want to gain stable returns with managed risks. However, the stock market involves several key participants that are working together to conduct millions of trades daily. NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) are the two main depositories working in India. For instance, investors trade with the stockbroker through the stock exchange, which makes trading possible via various other market players. All these participants work seamlessly to execute the trade and invest in the market. Depositories are one of these market players that play a crucial role, too.

Here, we will get into the details of NSDL and understand how it works.

What is NSDL?

NSDL, or National Securities Depository Limited is an organization that helps investors and traders to trade securities electronically. It is one of India’s oldest and major depositories that plays a crucial role in the storage of shares. Earlier, investors had to hold physical share certificates. However, with share dematerialisation, they can now store them digitally. To date, it has supported and enabled the dematerialisation of shares, making paperless trades possible online. Simultaneously, the entity is responsible for minimizing the risk associated with holding physical shares and securities, like theft, damage, wear, tear, etc.

NSDL is a part of the NSDL Group, which also comprises the NDML (NSDL Database Management Limited) and NSDL Payments Bank Limited. Since NDML and NSDL Payments Bank are the subsidiaries of NSDL, they work together to provide dematerialisation, settlement, and transfer-related services in the Indian market of securities. Protean eGov Technologies Limited, earlier NSDL e-Governance Infrastructure Limited, is another company that issues PAN cards and keeps records for the NPS (National Pension System) scheme.

As of March 31, 2023, it had more than 3.15 crore active Demat accounts, giving it a substantial market share. NSDL account holders are spread across 99% of the Indian pin codes. Consequently, it settles a majority of settlements in the Indian stock market in a dematerialised format.

An NSDL Demat account is relatively easy to open. The investors choose their preferred depository participant, fill out an account opening form, and submit their KYC details and documents. The depository participant verifies the information and opens an NSDL Demat account for the customer. Once the account becomes active, the customer receives a DP ID, master client report, client ID, tariff sheet, and a copy of rules and guidelines. Aspiring investors can log in to their NSDL Demat account to start trading in the NSE.

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National Securities Depository Limited was incorporated on August 8, 1996, as India’s first digital depository with nationwide coverage. It was a significant approach to modernize the country’s financial market, accelerating the transition process from a physical to a paperless economy. The central depository functions under the Ministry of Finance’s jurisdiction from Mumbai.

Although the Indian capital market was already vibrant with a history of over a hundred years, the paper-based trade settlement procedures were highly prone to delayed title transfers, bad deliveries, etc. The Depositories Ordinance of 1995 instigated the establishment of NSDL, which is now one of the biggest depositories in the world. Its state-of-the-art infrastructure handles a majority of securities trading in the market in dematerialised form.

To summarize, NSDL launched the concept of dematerialisation in India. Within eight years of its establishment, it implemented the T+2 settlement process in the Indian securities market. Currently, it is on the way to implement the T+1 settlement process in phases.

How does it work?

National Securities Depository Limited works similarly to a bank account for bonds, shares, mutual funds, and other securities represented by physical or digital certificates. It was incorporated in 1996 to accelerate the process of securities transfer, saving a lot of time by handling the trade electronically. Aspiring investors and traders can open NSDL accounts to maintain financial securities electronically. Multiple market players, including investors, banks, and brokers, can open NSDL accounts through depository participants. DPs are intermediaries between traders/investors and the NSDL.

Traders hold their securities in depository accounts, similar to holding cash in bank accounts. They can use simple account transfers to transfer securities ownership from one account to another, just like a bank transfer. The entire process eliminates the hassles and risks associated with hefty paperwork. Consequently, trading digitally through NSDL costs substantially less than trading with physical certificates.

After opening an NSDL Demat account, traders can buy and sell shares electronically. The authority sends SMS alerts to account holders to keep them informed about ongoing transactions. Other NSDL facilities include e-voting, electronic delivery instruction slips, and the NSDL mobile application. Since the transactions involve finances, account holders should never share their credentials with anyone to avoid unauthorized access or hacking.

In short, NSDL develops efficient solutions to enhance the safety and efficiency of settlements in the securities market system. It is a central body developing products to nurture the needs of the Indian financial industry.

Benefits of NSDL

Here are a few benefits that NSDL offers

Faster Settlement

National Securities Depository Limited has the fastest mode of transaction settlement. The company settles them on the second day of trading, improving their liquidity and enabling a quicker investor turnover.

No Risks of Physical Certificates

The primary purpose of establishing NSDL is to eliminate the risks associated with physical certificates, such as physical wear and tear, loss, or theft. Holding securities in a dematerialised format avoids such risks. Moreover, it saves money, time, and space related to issuing and storing physical certificates.

Reduced Paperwork

Since the NSDL manages the account online, the entire process does not involve any paperwork, saving a lot of time and hassle managing lengthy documents.

No Stamp Duty

Since depositories transfer the securities electronically, no stamp duty-related formalities are involved in transferring shares, mutual funds, bonds, etc.

Transmission Process

If an investor wants to transfer their ownership securities, they just need to provide the relevant documents to the depository participant. NSDL immediately updates the details in all companies’ databases.

Easy Registration and Transfer

The investor becomes the legal owner of the security after purchasing it. That means they don’t need to send transaction receipts to the registrar, eliminating the risk of delays and loss in the process.

Faster Disbursal of Benefits

NSDL allows companies to easily disburse corporate benefits to investors in the form of bonds, shares, debentures, etc., offering a safe and quick way to transfer.

Periodic Reports

NSDL sends periodic account statements via email, comprising consolidated details of every transaction taking place through the account.

Services Provided by NSDL

Let’s look at the services provided by NSDL:

Basic NSDL Services

The basic services include services to investors, brokers, banks, and other security issuing agencies working in the Indian financial market. Investors must open a beneficiary, intermediary, or clearing member account with a DP to avail of these services. Some of these services include:

  • Dematerialisation

    Converting physical share certificates to electronic shares

  • Rematerialisation

    Converting electronic share certificates into physical format

  • Market Transfer

    Purchasing securities or selling them in digital format

  • Off-Market Transfer

    Delivering securities from sub-brokers outside of the clearing house

  • Inter-Depository Transfer

    Transferring securities from one depository account to another

  • Corporate Actions

    Bonuses, dividends, ESOPs, etc., to investors from corporates

Value Added Services

It offers a variety of value-added services as well, including the following:

  • Automatic Delivery Out Instructions

    If an investor wants to move securities from their pool account to a delivery account automatically, they can give instructions for the same to the clearing corporation.

  • Distribution of Dividends

    Shareholders receive dividends in the form of cash.

  • Borrowing and Lending

    Intermediaries authorized under the Securities Lending Scheme, 1997, with SEBI, can get approval from NSDL to borrow and lend money.

  • Public Issue

    According to the SEBI guidelines, all public share trades should take place in dematerialised form only.

  • SMS Alerts

    NSDL sends free SMS alerts to all Demat account holders whenever a transaction takes place.


    It is a single Consolidated Account Statement that contains details of every statement the investor makes in the securities market, including bonds, debentures, equity shares, mutual funds, etc. The statement helps investors to access and monitor their portfolios electronically.

How NSDL Differs from CDSL?

Both NSDL and CDSL are Indian depositories that hold financial instruments, stock investments, and securities in dematerialised form. They have depository participants through which investors can trade and hold the securities. Here are a few points of differences between the two depositories

  • Trading Stock Exchange

    The biggest difference is that the NSDL stores bonds, ETFs, stocks, etc., electronically that are traded on the National Stock Exchange. On the other hand, CDSL keeps copies of securities traded on the Bombay Stock Exchange.

  • Age

    NSDL is the first electronic depository established in India in 1996. CDSL was incorporated later in 1999.

  • Promoting Authorities

    The National Stock Exchange promotes NSDL along with many other premier financial institutions and banks like Unit Trusts of India, Industrial Development Bank of India, etc. On the other hand, the Bombay Stock Exchange promotes the CDSL along with other premiere financial institutions and banks like Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, etc.

  • Demat Account Number

    The NSDL Demat account number is a 14-digit number beginning with IN, while a CDSL Demat account number is a 16-digit numeric code without IN. Moreover, the number of depository participants is higher with NSDL than with CDSL.

NSDL PAN Application Process

A PAN card is the most significant document necessary for filing income tax returns and carrying out other related tasks. Whether an individual wants to purchase a property, open a bank account, or buy an asset, they need a PAN card via NSDL e-Governance Infrastructure Limited. These are the steps to apply for an NSDL PAN card:

  • Visit the official NSDL website

  • Click ‘Application Type’

  • Select the application type (Form 49A for Indians and Form 49AA for foreigners)

  • Select a category from the drop-down menu

  • Fill in the details carefully, including the applicant’s name, title, date of birth or business formation date, email address, mobile number, etc.

  • Tick mark on the terms and conditions

  • Enter the CAPTCHA code and submit the application form

  • The payment page will open where the applicant must pay the applicable PAN card fee

  • Select a preferred payment method from debit card, credit card, check, DD, or net banking

  • Receive an acknowledgement number after successful submission of the PAN card application

  • Take a printout of the acknowledgement paper, paste a passport-sized photograph on it, and sign with a black pen

  • Mail the receipt to the Income Tax Department along with a valid identity and address proof

  • The department will send the PAN card after successfully validating the documents

How to Check NSDL PAN Application Status?

A PAN card is a necessity for every taxpayer in India. It provides a 10-digit alphanumeric number linked with the taxpayer’s income tax details. The Indian government has mandated that each taxpayer obtain a PAN card. When an individual applies for a PAN card through the NSDL website, they get a 15-digit acknowledgement number that they can further use to track their application status. After applying for a PAN card, applicants can check their PAN application status through the TIN-NSDL portal.

Checking the PAN application status using the 15-digit acknowledgement number:

  • Visit the TIN-NSDL website

  • Click on “Track your PAN/TAN Application Status.”

  • Select “PAN-New/Change Request” from the “Application Type” section

  • Enter the 15-digit acknowledgement number in the space provided

  • Enter the CAPTCHA code to verify the PAN card application status

  • Click on “Submit” to view the NSDL PAN card status

Checking the PAN application status without the acknowledgement number

  • Visit the TIN-NSDL website

  • Click on “Track your PAN/TAN Application Status.”

  • Select “PAN – New/Change Request” in the Application Type section

  • Visit the Name section to check the status without an acknowledgement number

  • Enter the applicant’s first, middle, and last name and date of birth

  • Click on the “Submit” button to view the PAN card status

Checking the PAN application status with Name and Date of Birth

  • Visit the Income Tax e-Filing portal at

  • Click on ‘Verify your PAN’ under “Quick Links”

  • Enter details like full name, mobile number, date of birth, etc.

  • Click on “Continue”

  • Enter the OTP sent to the registered mobile number

  • Click on “Validate.”

  • A new page will appear showing the latest PAN card application status

NSDL Impact on the Stock Markets

NSDL is a central depository that has played an important role in transforming paper-based securities transactions into digital transfer modes. Since its inception, it has supported and facilitated paperless securities trading in dematerialised form. At the same time, it removes the risks associated with physical share certificates, such as delivery delays, loss, fraud, theft, damage, and wear and tear.

NSDL has impacted the Indian stock market in many ways by bringing about several positive changes in the financial markets. Below are a few points:

  • Eliminates the risk of buying and holding physical share certificates

  • Reduces the cost of issuing original share certificates and duplicate ones in the event of loss or damage

  • Eradicates the chances of bad deliveries by holding all securities in dematerialised form

  • It makes the process of trade settlements smoother and faster, thus improving their liquidity and turnover speed

  • Minimizes the paperwork involved to make the entire process smoother and less cumbersome

  • Keeps investors and traders up-to-date about their financial transactions through periodic digital statements

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NSDL Helpline Number

The head office of NSDL is situated in Mumbai, with branch offices in several cities, including Kolkata, Delhi, Chennai, and Ahmedabad. In case of any query, individuals can call the NSDL toll-free number 1800222080. Each branch office also has its individual phone number, including the following:

Delhi: 2335 3815 / 17, Kolkata: 2281 4661 / 62, Chennai: 2814 3917 / 18, Ahmadabad: 2646 1376

Apart from contacting the NSDL by phone, it is also accessible via email at, Moreover, the NSDL Mobile Application Cell is available at (022) 24994433.

Frequently Asked Questions

NSDL PAN is a permanent account number that the Indian government assigns to each tax assessee, both on an individual or corporate level. NSDL e-Governance Infrastructure Limited is a subsidiary of NSDL, issuing PAN cards and maintaining NPS records in India.