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Question
Study the following case/situation and express your opinion.
| Mr. Satish holds 100 shares of Raj Company Ltd. in physical mode and wishes to convert the same into electronic mode: |
- Mr. Satish holds a Savings Bank Account with SBI Can he deposit his shares in this account for demat?
- What type of account is needed for the same?
- Is the RBI which will be the custodian of shares of Mr. Satish after demating?
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Solution
- No, Mr. Satish cannot deposit his shares in a Savings Bank Account for dematerialization. Savings accounts are meant for cash deposits and do not hold shares or securities.
- Mr. Satish needs a Dematerialized (Demat) account to convert his physical shares into electronic mode. A Demat account is specifically designed to hold shares and securities electronically.
- No, the RBI (Reserve Bank of India) will not be the custodian of Mr. Satish's shares after dematerialization. Depositories like NSDL (National Securities Depository Limited) or CDSL (Central Depository Services Limited) manage electronic securities custody in India.
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