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Question
Explain the following term/concept:
Depository system
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Solution
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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RELATED QUESTIONS
Select the correct answer from the options given below and rewrite the statement.
In Depository System, securities are held in ______ form.
Depository Act was passed in __________.
Select the correct answer from the options given below and rewrite the statement.
______ has to pay charges to maintain Demat Account.
Write a word or a term or a phrase which can substitute the following statement.
This mode of holding securities may result in loss and theft of certificates.
Write a word or a term or a phrase which can substitute the following statement.
The Agent of the Depository.
State whether the following statement is true or false.
Physical mode of holding securities is risky.
State whether the following statement is true or false.
DP is an agent of Depository.
State whether the following statement is true or false.
A Bank can work as a DP.
Find the odd one.
Select the correct option from the bracket.
| Group ‘A’ | Group ‘B’ |
| a) First depository in India | 1) ____________ |
| b) ____________ | 2) Rematerialisation |
| c) Fungibility | 3) ____________ |
| d) ____________ | 4) ISIN |
(12 digit code, NSDL, Electronic to physical, No distinctive number)
Answer in one sentence.
What is Depository System?
Correct the underlined word and rewrite the following sentence.
Banking system leads to a scrip less capital market.
Correct the underlined word and rewrite the following sentence.
India has a single Depository system.
Justify the following statement.
Depository provides easy and quicker transfer of shares.
Give one word or phrase for the following sentence:
How securities are settled?
Explain any four advantages of depository system to the company.
