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Explain the following term/concept: Depository system

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प्रश्न

Explain the following term/concept:

Depository system

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उत्तर

Under Depository System, securities are held in electronic form. The transfer and settlement of securities are done electronically. The Depository System maintains the accounts of the shareholder, enables transfer and collects dividends, bonus shares, etc., on behalf of the shareholder. This system is also called a scripless trading system. In India, the Depository System was introduced by passing the Depository Act in 1996. Under this Act, a competitive multi-depository system consisting of two depositories, viz., NSDL and CDSL, was set up. The world’s first Depository was set up in 1947 in Germany.

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Depository System
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