Question

Study the following case/situation and express your opinion.

Mr. Z holds 100 shares of Peculiar Co. Ltd. in Physical mode and wishes to convert the same in electronic mode :

1. Mr. Z holds a Saving Bank Account with CFDH Bank Ltd. Can he deposit his shares in this account for Demat?
2. What type of account is needed for the same?
3. Is it the RBI which will be the custodian of shares of Mr. Z after demating?

Answer 1

1. No, Mr. Z cannot deposit his shares in his bank account for demat.
2. A demat account is required for converting physical shares into electronic holding.
3. No, RBI will not be the custodian of the shares of Mr. Z. The depository i.e. NSDL or CDSL will be the custodian of shares of Mr. Z after demating.