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Question
Justify the following statement.
Depository system is very similar to the banking system.
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Solution
- As a bank keeps the money safe. Similarly, a depository system keeps the securities safe.
- As in a bank, funds are held in accounts having unique numbers. Similarly, in a depository system, securities are held in accounts having unique IDs.
- Like a bank, there is no physical handling of securities during allotments, transfers, etc.
- In a bank, the transfer of funds between accounts is done. Similarly, in a depository system, the transfer of securities between accounts is done.
- Hence, depository system is very similar to the banking system.
RELATED QUESTIONS
Write notes on Importance of Depository system.
Select the correct answer from the options given below and rewrite the statement.
India has a ______ depository system.
Select the correct answer from the options given below and rewrite the statement.
______ has to pay charges to maintain Demat Account.
Match the pairs.
| Group ‘A' | Group ‘B' |
| a) Bad Delivery | 1) 1956 |
| b) Depository Act | 2) A 12 digit number/code. |
| c) ISIN | 3) Connects Government and Bank. |
| d) Depository participant | 4) Second Depository in India. |
| e) CDSL | 5) The Issuer Company. |
| f) Depository | 6) Problem faced in physical mode. |
| g) Beneficial owner | 7) A 10 digit number/code. |
| 8) Connects Depository and Investor. | |
| 9) First Depository in the world. | |
| 10) Coustodian of securities in electronic form. | |
| 11) Problem faced in electronic mode. | |
| 12) 1996 | |
| 13) Government Organisation. | |
| 14) The Investor. |
Write a word or a term or a phrase which can substitute the following statement.
This system allows faster and easier transfer of securities.
State whether the following statement is true or false.
Allotment of securities take longer time when in physical mode.
State whether the following statement is true or false.
India has a multi Depository System.
Find the odd one.
Select the Suitable word for the following.
Dematerialization ____________.
Select the Suitable option for the following.
First depository of world ____________.
Select the Suitable option for the following.
CDSL ____________.
Answer in one sentence.
What is Depository System?
Answer in one sentence.
Give examples of action termed as corporate action.
Correct the underlined word and rewrite the following sentence.
Allotment and Transfer of securities are time consuming in electronic mode.
Justify the following statement.
The electronic holding of securities is safer than physical holding.
State benefits of the depository to Investors.
Explain any four advantages of depository system to the company.
Explain the following term/concept:
Depository system
