Financial Evaluation of Depositories (NSDL and CDSL) in India

Abstract

In India household savings plays a predominant part of gross National Savings. So, unless the savings of small investors are invested in some profitable equity or Bond directly or through intermediaries we cannot expect to have a well developed Capital Market. At the same time Ensuring efficiency and transparency in the stock market operations can solve many grievances of investors. As a part of reforms in Capital  Market and in order to bring efficiency and transparency in the operations of fund transfer in both primary and secondary market an initiative step was taken by SEBI in the form of bringing DEPOSITORY SYSYEM IN INDIA.In the depository system, the ownership and transfer of securities takes place through electronic book entries. This system rids all the problems which physical handling of securities possess and minimizes the time taken for transfer of securities .By doing so this system achieves the object of ensuring transparency and efficiency in operations. There are two Depositories operating in our country first one being National Securities Depository Limited established in 1996 and the second one  central Depository Securities Limited establish in 1999.The thrust of Depository operations lies in the performance of intermediaries known as Depository Participants. This system notifies the investor as Beneficial Owner, who can opens a Demat account with any of the Depository or can have the same with both.This paper titled “Financial Evaluation of Depositories (NSDL & CDSL) in India” focuses mainly on the performance of both the Depositories. The present study is purely based on the secondary data. The period of study is from 1st April 2004 to31st March 2014 that is for 10 years. The study finds that depositories have made remarkable achievement   by improving their financial Progress during the period under study.