Fintotal News Analysis | SEBI Directs Depositories for No-Frills Demat Account
SEBI Directs Depositories for No-Frills Demat Account
Ruby Jacob, 30 Aug 2012

After RBI's no-frills bank account it is SEBI's turn to take financial inclusion efforts to the next level. In order to encourage direct investments in equities SEBI has directed all depository participants (DPs) to provide no-frills demat account to retail investors.

Called as Basic Services Demat Account (BSDA), they will be offered at zero annual maintenance charges to account holders holding less than Rs 50,000. For those holding up to Rs 2,00,000, a maximum of Rs 100 will be charged. Demat account can hold shares, mutual fund units and bonds. Value of holding is determined on the basis of NAV or closing price on the day.

Maximum value of holding in the account cannot exceed Rs 2 lakhs at any point in time. If the value of securities exceeds this the DP may charge the usual charges applicable to the regular demat holders.

Only one Basic Services Demat Account can be held by an individual as first holder across all depositories. DPs have also been asked to give the option to existing demat holders to convert to BSDA if they are eligible.

Services provided in the regular demat account will be provided to these account holders as well. All BSDA holders will have to register their mobile numbers for sms alerts for debit transactions. SEBI has directed DPs to make the accounts available from 01 October 2012.

Majority of demat account holders maintain zero balance in their accounts and about 10% hold less than Rs 2,00,000. This decision is set to benefit a whopping 60% of the existing demat account holders, according to SEBI chief U K Sinha.

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