Shcil Depository)

A PROJECT REPORT
ON
“Depository Participants in Bangalore”

A Comparative Analysis.
Submitted to
All India Management Association Centre for Management
Education
Management House,
14 Institutional Area,
Lodhi Road,
New Delhi-110003.
JULY 2004-2006
BY
CHANDRIMA NANDI
Registration No. 800420591
GUIDED BY
LATIKA ROY
Area Manager
For the Partial Fulfillment of

POST GRADUATE DIPLOMA IN MANAGEMENT
DECLARATION
I, Chandrima Nandi, studying in Alliance Business Academy, Bangalore do

hereby declare that this Project relating to Stock Holding Corporation of
India Ltd (SHCIL) and the title “A Comparative analysis of the depository
participants in Bangalore” has been prepared by me after undergoing the
prescribed industrial survey as part of the requirement of the PGDM program of
AIMA. My guide for the training has been Mrs. Latika Roy. I, further declare
that this project work is the outcome of my efforts and not a replica of any other
report/work submitted to any university or boards. I also declare the same
report has not been submitted to any other University or Board for the award of
any other degree or diploma.
Date: Name of student: Chandrima Nandi

Place: Bangalore Reg. No - 800420591
ACKNOWLEDGEMENT
An exchange of ideas generates a new object to work in a better way. Apart from
the ability labor and time devotion, guidance and co-operation are two pillars for
the success of a project. Whenever a person is helped or co-operated by others,
his heart is bound to pay gratitude to others.
A satiation and pleasure that accompany the successful completion of task would
be incomplete without the mention of the people who have made it possible and
whose consent guidance and encouragement served as a guiding light for the
completion of the study.
I consider it privilege to express through my report a few words of gratitude to all

those who have guided and inspired me in completing this study. I would like to
express my deep sense of gratitude to Mr. Harish Shenoy and all the staff
members of their giving me support and helping me during my project study.
I would also like to express my sincere thanks to honorable President, Mr. Sudhir
Angur and our Director Mr. B.V.Krishnamurthy for giving me an opportunity for
undergoing this study. I would also like to express my gratitude to my project
guide Mrs. Latika Roy for her constant encouragement and guidance without the
task would not have been completed.
Last but not the least I would like to thank my parent and friends for their support
and suggestions.
THANKYOU ALL
CHANDRIMA NANDI
CONTENTS
Chapter No. Contents Page
Chapter I At a Glance 1-2
Chapter II Introduction 3-7
• Background
• Purpose
• Objective
• Limitations of the study
• Plan analysis
Chapter III Industry Profile 8-23
Chapter IV Company profile 24-29
Chapter V Products and Services 30-79
Chapter VI SWOT Analysis 80-82
Chapter VII Methodology 83-84
Chapter VIII Analysis & interpretation 85-104
Chapter IX Summary of findings 105-107
Recommendations & Conclusion 108-110
Bibliography 111-112
Annexure 113-116
CONTENTS OF THE TABLES
Serial Title Page

Number Number
Table 1 Age group of respondents 87
Table 2 No. of shareholders trading in SHCIL 88
Table 3 No. of years the respondents holding the shares 89
in SHICL
Table 4 How safe the securities are in opting the demat 90
Table 5 Most preferred DP product 91
Table 6 Selection of the source in which information 92
is available
Table 7 Selection of Stock Exchange by the shareholders 93
and brokers.
Table 8 Attribute of services available at SHCIL 94
Table 9 Selection of investment avenues. 95
Table 10 Tailor-made services 96
Table 11 Value-added services available to the clients 97
at SHCIL
Table 12 Satisfaction in terms of Infrastructure, software 98
of the organization.
Table 13 Effectiveness of the DP services compared to 99
Other financial institutions.
Table 14 Interest rates in terms of loan against demat 100
Held in DP.
Table 15 Safety & security of the demat account. 101
Table 16 Service charges charged by SHCIL 102
Table 17 Effectiveness in settling the stock 103
Table 18 On-line trading. 104
CONTENTS OF THE GRAPHS
Serial Title Page

Number Number
Table 1 Age group of respondents 87
Table 2 No. of shareholders trading in SHCIL 88
Table 3 No. of years the respondents holding the shares 89
in SHICL
Table 4 How safe the securities are in opting the demat 90
Table 5 Most preferred DP product 91
Table 6 Selection of the source in which information 92
is available
Table 7 Selection of Stock Exchange by the shareholders 93
and brokers.
Table 8 Attribute of services available at SHCIL 94
Table 9 Selection of investment avenues. 95
Table 10 Tailor-made services 96
Table 11 Value-added services available to the clients 97
at SHCIL
Table 12 Satisfaction in terms of Infrastructure, software 98
of the organization.
Table 13 Effectiveness of the DP services compared to 99
Other financial institutions.
Table 14 Interest rates in terms of loan against demat 100
Held in DP.
Table 15 Safety & security of the demat account. 101
Table 16 Service charges charged by SHCIL 102
Table 17 Effectiveness in settling the stock 103
Table 18 On-line trading. 104
Stock Holding Corporation of India Limited
At a Glance
Alliance Business Academy 1

Executive Summary
The study is about comparing the different services and products offered at
SHCIL with the other Depository participants. Project mainly deals with how
the resources of the organization are used in their day-to-day activities. For a
finance manager it will be of great help to know how to properly utilize the
resources of the organization. It is not only the theory, which will help in the
corporate world, but also how things happen practically. Here there is an
opportunity to learn how the things happen practically. Every day the various
activities happening in the department are observed and understood carefully.
The study initially concentrated on obtaining the information from the investors
on various parameters. As it is a finance project mainly data will be available
internally. After finishing this task, the actual analysis of the project has been
started where certain important calculations has been done. This helped to
come out with some conclusions. Also the data pertaining to some Demat
Section Managers has been taken and analyzed which made to arrive at
some interim conclusions as a part of project.
Stock holding has various financial Products and Services to be offered to the
clients but problem lies in the low promotional activities undertaken by it, due
to which though it has the services not offered by other DP's it fails in
captivating customers. Another problem faced by it is technology; systems at
stock holding are not technologically upgraded: it follows old technology and
modes of making entries of payments into systems. Due to system error
payments to franchisees are not made on time, which in turn affects their
business relationship. Since stock holding is into DP's business from long time
it still follows old methods of operations. Thus, the researcher got interested to
conduct study on the Depository Services under the title “Comparative
analysis of various Depository Participants with reference to Stock
Holding Corporation of India limited”.

Introduction

Background
Depository
A depository is a facility for holding securities, which enables securities
transactions to be processed by book entry. To achieve this purpose, the
depository may immobilize the securities or dematerialise them (so that they
exist only as electronic records).' India has chosen the dematerialisation
route. In India, a depository is an organization, which holds the beneficial
owner's securities in electronic form, through a registered Depository
Participant (DP). A depository functions somewhat similar to a commercial
bank. To avail of the services offered by a depository, the investor has to
open an account with it through a registered DP.
Depository Participant
A Depository Participant (DP) is an agent of the depository who is authorized
to offer depository services to investors. Financial institutions, banks,
custodians and stockbrokers complying with the requirements prescribed by
SEBI/ Depositories can be registered as DP.
Benefits of Depository
 Bad delivery eliminated
 Immediate transfer of shares
 No stamp duty on such transfers
 Elimination of risks that are normally associated in dealing with
Physical certificates - loss / theft / mutilation due to careless handling /
forgery / etc
 Reduced transaction cost

Services provided by Depository

 Dematerialisation (usually known as demat) is converting physical
certificates to electronic form
 Rematerialisation, known as remat, is reverse of demat, i.e. getting
physical certificates from the electronic securities
 Transfer of securities, change of beneficial ownership
 Settlement of trades done on exchange connected to the Depository
 Pledge / Hypothecation of demat shares, viz. Loan against shares
 Electronic credit in public offering of the Companies
 Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into
electronic form
No. of Depository in the country

National Securities Depository Ltd.
Central Depository Services Ltd.
Research Title
A Comparative Analysis of Depository Participants in Bangalore with
reference to India’s Largest DP “Stock Holding Corporation Of India Ltd.”
Purpose
The past few years have seen a phenomenal growth in the capital market
leading to an explosion in transaction holding despite the transparency offered
by NSE and BSE, the primitive settlement and transfer process kept the
biggest chunk of the market risk- bad delivery, delayed transfer, fake
certificates, loss and theft etc, unresolved. The Depositories is the answer to
such risk and problems.

Introduction of the depositories has paved the way for instituting an

infrastructure for eliminating these risks and increasing the efficiency of the
system.
The purpose of this study is to provide information to both the organization
and the investors/savers, providing to the former present state and future
prospect and to the later differences among the services provided by the
various depository participants.
A comparative analysis of various Depository Participants with reference to
India’s Largest DP “Stock Holding Corporation Of India Ltd.”. This study will
help to have a better understanding about where SHCIL stands in the market
today and also to compare various DPs on certain parameters.
Objectives
The main objectives of the project undertaken are-
 To understand the attitude and perception of investors/savers towards
the DPs.
 To ascertain SHCIL’s position in the competitive market.
 To collect the data on various parameters
• Tariff
• Service
• Reach(No. of branches)
• Promoters
• Product
 To develop and analyze strategies of SHCIL to help improve its
market share.
 To offer suggestions based upon the findings.

Limitations of the study

 The study is limited only to SHCIL, JC road branch Bangalore.
 There was a constraint of time.
 The entire study is based on the information provided by the various
respondents at SHCIL.
 For the purpose of collecting vital information, Manager of the
organization is only contacted & interviewed. Since he is an individual, his
biases may have creped into the data given.
 The policy of the company does not allow getting all the information.
PLAN ANALYSIS
The collected data will be analyzed with the help of parametric techniques
such as percentages, correlation, regression, co-efficient of variation and the
like. Wherever necessary tables charts, graphs, diagrams are used.

INDUSTRY PROFILE

INDUSTRY PROFILE
FINANCIAL MARKET
Globalization of the financial market has led to a manifold increase in the

investment. New markets have been opened: new instruments have been
developed: and new services have been launched. Besides, a number of
opportunities and challenges have also been thrown open. Stock Holding
Corporation of India Limited. (SHCIL), the premier custodian of Indian capital
market providing services of international standards, is geared up to
reposition itself in the changed scenario. With world — acclaimed automation
and a team of committed professionals, SHCIL is confident of scaling new
heights. Combining its financial strength and technical expertise to serve the
clients better, wherever and whenever it is needed, SHCIL envisages acting
as a partner one can trust. The corporation has restructured and geared itself
to serve the growing needs of individual investors in the paperless
environment. The organization in its willingness to provide its state of art of
financial services in securities industries to the various segments of the
investors has expanded itself to more than 100 cities across the country. SHC
desires to give investors the time and attention in monitoring the performance
of their securities consistently. All aimed at providing the investor with
optimum financial gain.
India has a well established capital market mechanism where in effective and
efficient transfer of money capital or financial resources from the investing
class to the entrepreneur class in the private and the public sector of the
economy occur. Indian capital market has a long history of organized trading
which started with the transaction in the loan stocks of the East India
Company; from that time it has undergone drastic changes to meet the
requirements of the globalization. The Indian capital market had been
dormant in the 70’s and 80’s has witnessed unprecedented boom during the

recent years. There has been a shift of house hold savings from physical
assets to financial assets, particularly the risk bearing securities such as
shares and debentures. Capital market structure has also undergone sea
changes with number of financial services and banking companies, private

limited companies coming into the scene which made the competition in the
market stiffer.
CAPITAL MARKET
The capital market consists of primary market and secondary market

segments. The primary market deals with the issue of new instruments by the
corporate sector such as equity shares, preference shares and debentures.
The public sector consisting of central and state governments, various public
sector industrial units (PSUs), statutory and other authorities such as state
electricity boards and port trust also issue bonds. The primary market in which
public issue of securities is made through a prospectus is a retail market and
there is no physical location. Direct mailing, advertisements and brokers reach
the investors. Screen based trading eliminates the need of trading floor.
The secondary market or stock exchange where existing securities are traded
is an auction arena. Since 1995, trading in securities is screen based. Screen
based trading has also made an appearance in India. The secondary markets
consist of 23 stock exchanges including the NSE and OTCE and Inter
Connected Stock Exchanges of India ltd. The secondary market provides a
trading place for the securities already issued to be bought and sold. It also
provides liquidity to the initial buyers in the primary market to re-offer the
securities to any interested buyer at a price, if mutually accepted. An active
secondary market actually promotes the growth of the primary market and
capital formation because investors in the primary market are assured of a
continuous market and they can liquidate their investments in the stock
exchange.

DEPOSITORY
Depository is an organization where the securities of a share holder are kept

in the electronic form at the request of the shareholder through a medium of a
depository participant (DP). The principal function of a depository is to
dematerialise securities and enable their transactions in book form
electronically.
In India, the Depository Act defines a depository to mean “A company formed

and registered under the companies act, 1956 and which has been granted a
certificate of registration under sub-section (la) of section 12 of the Securities
and Exchange Board of India (SEBI) act, 1992”.
Legal Framework of Depositories:
The depositories act of 1996 provides for regulation of depositories in

securities and for matter there with or incidental there to and came into from
2O” of September, 1995.
SEBI formulated the Depositories and participants regulations act, 1996 to

oversee the matter regarding admission and working of depositories and its
participant. The depositories act passed by parliament received the presidents
assent on august 1, 1996 enables the setting up of multiple depositories in the
country. Only a company registered under the Companies Act Of 1956 and
sponsored by the specified categories of institution can setup depositories in
India. The depository offers services relating to holding of securities and
facility processing of transactions in such securities in book entry form. The
transactions handed by depositories include settlement of market trades,
settlement of off trades, Securities lending and borrowing, pledge and
hypothecations.
Eligibility Criteria For a Depository:

Any of the following may be a depository:
1. A public financial institution as defined in section 4a of the Companies Act

Of 1956.
2. A bank included in the second schedule to the RBI Act, 1934.
3. A foreign bank operating in India with the approval of the RBI.
4. Recognized stock exchanges.
5. An institution engaged in providing financial services where not less than

75% of the equity is held jointly or severally by these institutions.
6. A custodian of securities approved by government of India.
7. A foreign financial services institutions approved by government of India.
The promoters of depository are also known as its sponsor. A depository

company must have a minimum worth of Rs. 100 Cr. The sponsor of the
depository has to hold at least 51% of capital of the depository company.
Agreement Between Depository and Issuers:
If either the issuer (a company which has issued securities) or the investor
opts to hold his securities in demat form, the issuer enters into an agreement
with the depository to enable the investors to dematerialize their securities.
Where an issuer has appointed a registrar to the issue and (R&T) agent, the
case may be for the securities declared for dematerialization
Rights and Obligations of Depositories:
1. Every depository should have adequate mechanisms for reviewing

monitoring and evaluating the controls, systems, procedures and safeguards.
2. Annual inspections of the procedures and same should be reported to

SEBI.
3. To ensure that the integrity of automatic data processor systems is

maintained to safeguard information.
4. Adequate measures including insurances, to protect the interests of the

beneficial owners against any risk.

Functions of Depository:
Dematerlisation
One of the primary functions of depository is to eliminate or minimize the

movement of physical securities in the market. This is done through
converting securities held in physical form in to holdings in to back entry form.
Accounts Transfer
The depository gives effects to all transfers resulting from the settlement of
trade and other transaction between various beneficial owners by recording
entries in the accounts of such beneficial owners.
Transfer and registration
A transfer is a legal change of ownership of a security in the records of the

issuer. Transfer of securities under demat occurs merely by passing book
entries in the records of the depositories, on the instructions of beneficial
owners.
Pledge and hypothecation
Depositories allow the securities placed with them to be used as collateral to

secure loans and other credits. The securities pledged are transferred to a
segregated or collateral account through book entries in the records of the
depository.
Linkages with clearing system
The clearing system performs the functions of ascertaining the pay-in (sell) or
pay (buy) of brokers who leave traded on the stock-exchange. Actual delivery
of securities to the clearing system from the selling brokers and delivery of

securities from the clearing system to the buying broker is done by depository.
To achieve this, depositories and the clearing system are linked electronically.
To handle the securities in electronic as per the Depositories Act 1996, two
depositories are registered with SEBI. They are: National Securities
Depository Limited (NSDL), Central Depository Services (India) Limited
(CDSL).
DEPOSITORY PARTICIPANTS
Depository participants (DPS) are described as an agent of the depository.

They are the intermediaries between the depository and the investors. The
relationship between the DP’s and the depository is governed by an
arrangement made between the two under the depositories act. In a strictly
legal sense a OP is an entity who is registered as such with SEBI under the
provisions of the SEBI Act. As per the provisions of this act a OP can offer
depository services only after obtaining a certificate of registration from SEBI.
Eligibility Criteria For Depository Participant
 A public financial institution as defined in sections of the companies

act.
 A bank included for the time being in the second schedule to the RBI.
 A foreign bank operating in India with the approval of RBI.
 A state financial corporation established under the provisions of section

3 of the state financial corporations act, 1951.
 An institution engaged in providing financial services promoted jointly

or severally by any of the institutions mentioned above.
 A custodian of securities who has been granted a certificate of

registration by SEBI.
 A clearing corporations or a clearinghouse of stock exchange.
 A stock broker who has been granted a certificate of registration by

SEBI.

 A non-banking finance company.
 A R& T agent who has been granted a certificate of registration by

SEBI.
A person desirous of becoming a DP of NSDL should make an application to

SEBI through NSDL. NSDL evaluates and sends to SEW within 30 with
recommendations. If all the conditions are met SEBI grants the registration
certificate to the applicant. SEBI prescribes a minimum net worth of

Rs.5OIakh for stock brokers, R&T agents and non-banking finance companies
(NBFCs) for granting them a certificate & registration to act as a DR. A
certificate of registration is valid for a period of 5 years. It may be renewed
after 5 years.
Rights and Obligations of Depository Participant
1. Agreement with beneficial owners:
The OP must enter into an agreement with a beneficial owner before acting as
a DR on his behalf. A DR while conducting business with a client, acts as an
agent of NSDL and is liable to the clients for all the acts and deeds performed
by him.
2. Separate accounts:
The DP shall open a separate account in the name of each beneficial owner’s
account only on receipt of instructions from beneficial owner.
3. Statement of account:
The OP should provide statements of accounts to the beneficial owner as laid

in the agreement with the beneficial owner. It should be done fortnightly if any
transactions are made and at least quarterly if no transactions are done, It can
be provided through internet.
4. Transfer or withdrawal by beneficial owner:
The DP should allow a beneficial owner to withdraw or transfer securities from

its accounts in such manner as specified in the agreement with beneficial
owner.

5. Connectivity:
The DP should maintain continuous electronic communication with each

P0SItory in which it is participant.
6. Monitoring, reviewing & evaluating internet systems & controls:
DP should have an adequate mechanism for the purposes of reviewing

monitoring and evaluating its internal accounting controls and systems. It has
to get an audit done on quarterly basis.
7. Reconciliation:
The DP shot reconcile its records with every depository in which it is

participant on a daily basis. The NSDL system is designed to do this
automatically every day at the end of the day (EOD).
8. Returns:
The DP should submit periodic returns to SEBI and to every depository in

which it is a participant.
9. DP to indemnify depository:
A DP has to indemnify the depository, its officers and employees for all costs,
fees, expenses, liabilities, taxes, actual losses and damages of any nature
what so ever suffered like failure to comply with laws, failure to deliver eligible
securities etc.
10. Prohibition of Assignment:
No DP can assign or delegate its functions as a participant to any other

person without prior approval of NSDL.
11. Insurance:
DP’s should take appropriate insurance cover to insure against losses arising
from any possible business risk and system failure.
12. Record of services:

The DP should maintain and preserve the documents for all transactions for a
minimum period of 5 years.
13. DP to ensure integrity and back-up of data:
Where DP’s maintain electronic records, they should ensure the integrity of
the data processing system. All necessary precautions should be taken to
ensure that the records are not lost, destroyed or tampered with sufficient
back-up of records should be taken and made available at all times at
different places. SEBI at any time may cancel the registration of DP if they are
not in complying with the rules laid by the depositories act. Like guilty of fraud,
repeated defaults. DR may sometimes choose to terminate its participation in
the depository by giving notice of less than 30 days.
GOVERNING BODIES OF DEPOSITORY PARTICIPANT
National Securities Depository Limited (NSDL)
National securities depository limited is the first depository to be set up in

India. It was incorporated on December 12, 1995. The Industrial Development
Bank Of India (IDBI) the largest development bank in India, UTI the largest
Indian mutual fund and the National Stock Exchange in India sponsored the
setting up of NSDL and subscribed to the initial capital. NSDL commenced
operations on November 8, 1996. Following organizations are share holders
of NSDL as on march 31, 2001:
a) INDUSTRIAL DEVELOPMENT BANK OF INDIA
b) UNITED TRUST OF INDIA
c) NATIONAL STOCK EXCHANGE
d) STATE BANK OF INDIA
e) GLOBAL TRUST BANK
f) CITIBANK
g) STANDARD CHARTED BANK

h) HDFC BANK
i) HSBC
j) DEUTSCHE BANK
k) DENA BANK
l) CANARA BANK
Ownership:
NSDL is a public limited company incorporated under the companies act,

1956. NSDL had a paid up equity capital of Rs.10 crore. The paid-up capital
has been reduced to Rs.80 crore since NSDL has bought back its shares of
the face value of Rs.4.2 crore in the year 2000. However, its network is above
Rs.100 crore as required by SEBI regulations. -
Management of NSDL:
NSDL is managed by professional board of director. The managing director

conducts the day to day operations. To assist the MD in his functions, the
board appoints an executive committee of not more than 16 members. The
eligibility criteria and period of nomination of the members of EC etc. are
governed by the bye-laws of NSDL in this regard.
Bye-laws of NSDL:
The bye-laws approved by SEBI which contain 14 chapters they are:
a) Short title and commencement
b) Definitions
c) Board of directors
d) Executive committee
e) Business rules
f) Participates
g) Safeguards to protect interest of clients and participants
h) Securities

i) Accounts by book entry
j) Reconciliation accounts and audit
k) Disciplinary action appeal
l) Appeals
m) Conciliation
n) Arbitration
Function of NSDL:
NSDL performs the following functions through Depository participants (DP)
 Enables the surrender and withdrawal of securities to and from the

depository (dematerialisation and rematerialisation).
 Maintains investor holdings in the electronic form.
 Effects settlement of trades not done on the stock-exchange (off-

market trades).
 Transfer of securities.
 Pledging I hypothecation of companies or corporates.
 Receipt of non-cash corporate benefits like bonus rights r electronic

form.
 Stock lending and borrowing.
The investors interact with a depository participant (DP) of NSDL. A DP can

be a bank, financial institution, a custodian or a broker. Just as one opens a
bank account to avail of the services of a bank, an investor has to open an
account with a DP in order to avail of the depository facilities.
Central Depository Services Of India Limited (CDSL)
Central depository services of India ltd were the second depository to be

granted the commencement certificate by SEBI on 8 February 1999,
inaugurated on 15 July 1999. It is promoted by the Bombay stock exchange,
in association of bank of India.

Both NSDL and CDSL interface with investors through their service providers
known as DP. The depository is interconnected. It is possible to transfer
shares from one depository to another.
CDSL was promoted by The Stock Exchange, Mumbai (BSE) jointly with
leading banks such as State Bank of India, Bank of India, Bank of Baroda
HDFC Bank, Standard Chartered Bank, Union Bank of India and Centurion
Bank.
CDSL was set up with the objective of providing convenient, dependable ‘and
secure depository services at affordable cost to all market participants. Some
of the important milestones of CDSL system are:
. CDSL received the certificate of commencement of business from SEBI in

February 1999.
• Honorable union finance minister, Shri Yashwanth Sinha flagged off the
operations of CDSL on July 15 1999.
• Settlement of trades in the demat mode through BOl shareholding limited,

the clearing house of BSE started in July 1999.
• All leading stock exchanges like national stock exchange, Calcutta stock
exchange, Delhi stock exchange, stock exchange Ahmedabad, etc have
established Connectivity with CDSL.
• As at the end of Dec 2004, over 4900 issuers have admitted their securities
(equities, bonds, debentures, and commercial papers), units of mutual funds,
certificate of deposits etc. into the CDSL system.
CDSL’s demat services are extended through its agents called Depository
Participants (DP). The DP is the link between the investor and CDSL. An
investor who opens a demat account with a DP can utilize the services offered
by CDSL. While the OP processes the instructions of the investor , the
account and records thereof is maintained with CDSL A DP is thus a t centre”
for the investor.

CDSL’s system is based on centralized database architecture with on-line

connectivity with DPs. Because of this centralized architecture, the cost for
setting up a OP outfit under CDSL system is significantly lower. Similarly, the
recurring costs to be incurred by a CDSL DP in terms of maintaining back-ups
and the related data storage are minimal. This enables a CDSL DP to offer
depository services to investors at an attractive price and at the same time
achieve break-even faster at much lower volumes. The centralized
architecture also allows CDSL-DP to make available to the investors a to-the-

minute status of their account and transactions.
BENEFITS AND SAFETY OF DEPOSITORY SYSTEM
In the depository system the ownership and transfer of securities take place
by means of electronic book entries. At the outset, this system capital market
of the dangers related to handling of paper. The benefits that are accrued by
this system are:
> Elimination of bad deliveries:
Once the holdings of investors are dematerialized, the question of bad

deliveries doesn’t arise because both transfer deed and share certificate are
eliminated in depository system.
> Elimination of all risks associated with physical certificate:
Dealing fl physical securities have the associated risks of loss of certificates

during movements to and from the registrars. These expose the investor to
cost of obtaining duplicate certificates, advertisement etc., such problems
don’t arise in the depository environment.
> No stamp duty:
No stamp duty for transfer of equity instruments and units of mutual funds in
this system.
> Immediate transfer and registration of certificate:
Once the securities are credited, to the investors account on payout, he

becomes the legal owner of the securities.

> Faster settlement cycle:
The exclusive demat segment follow rolling settlement of T+2 days which
enables faster turnover of stock and enhance liquidity with the investor.
> Buyer is secured:
In physical environment, the buyer is not secured since the shares purchased
may not be transferred. This is not the case with depository system.
> Faster disbursement of non-cash corporate benefits:
NSDL provides for direct credit of non-cash corporate entitlements like rights,
bonus etc., to an investors account ensuring faster disbursement.
> Reduction in rate of interest on loan:
Some banks provide these benefits against pledge of departmentalized

securities.
> Increase in maximum limit of advances:
This increases from Rs.l0 lakh to Rs.20 Lakh per borrower. There is also a
reduction in minimum margin from 50% to 25% by banks to advances against
demat securities.
> Reduction in brokerage:
Brokers may provide a reduction in the brokerage of 0.25% to 0.5% for trading
in dematerialised securities as it reduces their back office cost of handling
paper.
> Reduction in handling huge volumes of paper:
In the physical environment every entity involved in purchase or sale of

securities was to handle paper and pass on the paper to the next entity. But in
the depository system only the delivery instruction to be given by the client is
in the form of paper.
> Periodic status reports:
DP’s need to provide periodic reports to investors on their holding and

transactions.

> Dematerialized securities can be delivered in the physical segment:
From April 1998 this facility is available at stock-exchange where trading in

dematerialized securities is allowed. But physical securities are not allowed to
be delivered in the dematerialized segment, making dematerialized stocks
held with the investors more liquid than physical stocks.
>Elimination of problems related to change of address of investors,

transmission etc:
Investors have to inform the change of address to the OF which will be

reflected in the database of all the companies where the investor is a
registered holder of securities.
> Elimination of problems related to nominations:
An account holder can get securities in all companies transmitted transferred

to his account by completing formalities with a single entity.
> Elimination of problems related to selling securities on behalf of a minor:
A natural guardian is not required to take court approval for selling demat
securities on behalf of a minor.
> Convenient consideration of account:
To multiple accounts opened by investors, all accounts can be consolidated

into one account by giving instructions to DP.
> Convenient portfolio monitoring:
Client can monitor portfolio by checking a single statement of

holding/transactions
> Increased volumes:
Due to case in transaction and related costs, many players have

entered/increased their transaction, which increases liquidity.
> Newer services:

Opportunities like pledge / hypothecation and stock lending are given

specifically by depository system.
Many safety measures like investor grievances, insurances cover, computer

and communication infrastructure, periodic review, certificate of registration
were made necessary to protect investors.
Company profile

COMPANY PROFILE
STOCK HOLDING CORPORATION OF INDIA LIMITED

1.1 Introduction to the company:
Flagged off at the initiative of the Government of India, SHCIL enjoys an
enviable parentage that very few organizations can boast of, including leading
Indian Financial Institutions and the Insurance majors. It has been jointly
promoted by IDBI, ICICI, IFCI, IIBI, UTI, LIC, and GIC and its subsidiaries.
It is headed by luminaries from its promoter institutions who constitute its
Board of Directors and take policy decisions pertinent to the affairs of the
corporation. A senior management team that reports to the Managing Director
and the CEO aids, assists and strategies business lines for the Corporation.
The primary focus of the corporation was specific – to set up custodial
services of international standards in India and in the process to manage the
entire array of post trade activities of Financial Institutions and Foreign
Institutional Investors with dedicated client relationship teams and state-of-
the-art reporting systems.
The corporation quickly garnered nearly 70% market share of the domestic
custodial business and the financial figures shot up impressively for the first
decade of its existence.
With sustained market leadership, the biggest investing body of the country
in its client list, SHCIL ensures that its technology support not only holds
enormous databases together but also makes sense and service out of it too.

The Smithsonian Institute’s Award for “Innovative Use of Technology in the

Field of Finance” in1996 and “Computer Society of India Award” were
affirmations of its efforts, long before information technology started
leapfrogging across the country.
SHCIL has also received “No Action Letter” from Securities Exchange
Commission (SEC) of USA, which renders it an eligible institution to hold
assets of US-based funds.
1.2 Vision of the Company:

“To become one stop shop for all financial services”.
This vision of the company is slowly being achieved with the foray of the
company into new financial services and products into its portfolio the latest to
be the Insurance product, which would be soon distributed.
1.3 Mission of the Company:

“To spread Quality Service through the innovative use of technology”.
1.4 Objectives of the Company:

 To retain the No. 1 position in the DP industry by being ahead of all
other DP service providers with the innovative use of technology.
 To provide justified service to every rupee the client pays.
 To ensure security and convenience of transaction to its clients at
reasonable price.
 To channel technology to make convenient products for financial
market that give quantum benefits to investors, corporate houses and
brokers.
 To reach 37 million Internet users in the years to come with e-
commerce projection scaling USD 1.7 billion.
 To move with speed and ease, diversifying into new areas,
considerably on others and sharpening its focus and paradigms.
 To increase its customer base, this at present is 7 lakh.

 To evolve a new strategy to emerge as a broad based financial

powerhouse in the years to come.
 To find ways to make information and reporting system more effective
for the institutional clients.
 To expand to the South-East Asia, with the aim of becoming the leader.
1.5 Basic facts about SHCIL

 SHCIL is India’s largest depository participant.
 SHCIL has around 20% market share i.e. over 8 lakhs demat accounts.
SHCIL has approx, 50% market share of delivery- based transaction which
amount to 1.33 crore transaction.
1. Short title and commencement
2. Definitions
3. Board of directors
4. Executive committee
5. Business rules
6. Participates
7. Safeguards to protect interest of clients and participants
8. Securities
9. Accounts/transactions by book entry
10. Reconciliation, accounts and audit

HIERARCHICAL STRUCTURE OF SHCIL
BOARD OF DIRECTORS
MANAGING DIRECTOR & CEO
JOINT MANAGING
DIRECTOR
Sr V P ( BUS. DEV) Sr VP (FINANCE) VPs (FUNCTIONAL)
ASSISTANT VPs DIVISIONAL

MANAGERS
List of various functional VPs:

 VP (Depository Services)
 VP (IT)
 VP (Products)
 VP (Personnel)
 VP (HRD)
 VP (R&D)
 VP (Facilitation centre coordination)
DIVISIONAL MANAGER
ORGANIZATION STRUCTURE AT SHCIL, BANGALORE
Koramangala
Dy Manager B’Lore Manager CC
(Hubli) FC M’lore FC Malleswaram
CC
Jayanagar
CC
Davanagere
CC
Gulbarga Belgaum Shimoga
Udupi CC CC
CC CC
Asst. Mgr IT & Asst. Mgr Dy Mgr

(a/c’s) Automation (B.D)
Dy
Trades
Mgr
Derivatives Demat A/C Opening
SNC/COP & EB Billing Admin.

SLS
Product and services

PRODUCT PROFILE
1. ADDSHARES
SHCIL arranges loan against demat shares.
Tie up with reputed banks which offer you the most competitive interest rates
in the market.
You can use the shares in your free account as collateral and take a loan from
any of our empanelled banks.
We complete your documentation and processing and give you the cheque
within 48 hours of application.
This is a pure value-add to your depository account with us.
ADD shares are available at SHCIL centres in all the major cities.
Advantages

 Our tie-ups with banks give you a wide range of banks to choose from.
This reads as a wider range of specified and non-specified shares to
get a loan against.
 The ADDshares team helps you with the paper formalities precedent to
a loan.
 You can now get a loan at competitive interest rates and margins. This
is a resultant of our tie-up with a wide range of banks.
 ADDshares simplifies long-winded loan procedures for you and
facilitates early disbursement of funds.
 ADDshares is available at any of our branches, numbering over 120.
Procedure
If you do not have a DP account with us, open one.
Fill up the loan application form.
SHCIL forwards your loan application to the bank. SHCIL takes care of pledge
creation and intimation to the bank.
SHCIL follows up with the Bank and intimates you about the sanction of the
loan.
You can collect the cheque book issued by the bank from SHCIL or get it
couriered by us to you.
Documents required
Hold a Depository Account with SHCIL.
Copy of any two of the following documents towards proof of identity:
 Passport No., place of issue, expiry date

 Driving license
 Ration card
 Voters Identity card
 Copy of Income Tax Return
Pan card is a must now
Two passport size photographs.
2. EQUIBUY
Haven't we all gone through endless waiting periods after buying shares on
the exchange?
Even after payments have been made, we have to wait patiently to see those
shares reflected in the demat account. With the odd surprise of not seeing
them at all which you cannot discount.
As your depository participant, SHCIL assures you of safe delivery of shares

every time you buy on the exchange. We have lined up a panel of reputed
brokers who process your orders on priority.
Our position as the clearing corporations of leading stock exchanges ensures

smooth and sure credits into your account.

An initial advance and timely replenishments into the Purchase Advance

account take care of the payment for your purchases.
Go through the detailed Equibuy procedure and you will see how Equibuy is a
one stop shop for your share purchases.
Features
 An Equibuy instruction from you gets the shares credited into your
account the next day of payout
 Payment for your purchase made from a running account called
Purchase Advance into which you remit an initial advance of Rs.1000
and maintain a minimum balance of Rs.250 at all times.
 Choose one or more brokers from a list of 77 brokers empanelled with
SHCIL. Registration with broker is not necessary if you are already
registered under any of our other product schemes.
 Purchase on BSE or NSE.

 Available at 120 plus SHCIL centers across the country.
Advantages
 Buy shares with a single instruction and get an assured credit of shares
into your account the next day of payout. Leave the settlement
procedures and broker interaction to us.
 Affect a faster turnaround of your portfolio.
 Equibuy has a very nominal charge attached to it.
 An initial advance of Rs.1,000 in the Purchase Advance account and
replenishments, as and when necessary, take care of payment for your
purchases.
 Choose on the exchange to buy your shares from BSE or NSE.
 Choose from a range of 77 SHCIL empanelled brokers to execute your
purchases.

 Equibuy from the SHCIL center closest to you. Select from 120
plus SHCIL centers across the country.
Procedure
If you are not already registered with one or more of our 77 empanelled
brokers under any of our other product schemes, register yourself by filling up
a broker registration form.
Fill up a remittance slip to open the Purchase Advance account by making an

initial advance of Rs.1,000.
Approach any SHCIL branch and submit a purchase request slip.
Your request will be good till the end of the day. If the shares are not
purchased before the end of the day, your request lapses and a fresh request
can be submitted the next day.
Your purchase request is transmitted to the broker as soon as you place your
request.
The broker executes the trade and sends SHCIL the contract note. The
payment for the shares purchased along with the service charge is made from
the Purchase Advance account.
The shares get credited into your account the next day of payout.
Tariff
On delivery basis
0.65% of the value of transaction on delivery basis with a minimum of Rs.65

per client per broker per settlement.
Pre-Conditions for Equibuy

Have a demat account with SHCIL
Get registered with one or more of any of 77 brokers empanelled with SHCIL.
Registration with broker not necessary if you are already registered under any
of our other product schemes.
Open a running account called "Purchase Advance" by remitting an advance

Rs.1,000 by cash / cheque / DD. Replenish the balance when you need to
maintain a minimum balance of Rs.250 in the Purchase Advance account.
3. FUNDINVEST
Introduction
FundInvest is a basket of financial products, ranging from fixed income

securities like fixed deposits, Infrastructure bonds and Capital Gain Bonds to
variable income securities like Initial Public Offers (IPO’s) of Equities and
Mutual Funds. It is an attempt to offer financial products that cater to the
various investment needs of our esteemed clients. An effort to guide the
investor to a product portfolio that best suits his risk- return profile.
Applications for investments can be source from any of the SHCIL offices.
Apart from guiding our investor to pick up the right combination of investment
instruments, we help them 'after-sales' service, by acting as an interlocutor

between the investor and the issuer of the securities. SHCIL is an AMFI
Registered Mutual Fund Advisor (ARMFA).
Features
At present, we are distributing schemes of 25 different Mutual Funds
All these Funds offer wide varieties of investment option depending on the risk
appetite of the investor. Some of the major categories are:
Debt Funds: The Debt Funds have the mandate of investing primarily in Debt
papers
Equity Funds: The Equity Funds have the mandate of investing primarily in
Equities
Balanced Funds: The Balanced Funds have the mandate of investing both in
Equities as well as Debt papers.
Capital Gains Bonds come under 54 EC Capital Gains Bonds, where

investors get exemption from Capital Gain tax. These are 'on -tap ' issues. At
present, SHCIL is distributing Capital Gain Bonds of Rural Electrification
Corporation, National Housing Bank, Small Industries Development Bank of
India and National Highway Authority of India.
Infrastructure Bonds are issued by ICICI Bank and IDBI, with Section 88 as
the main feature
Private Placements: Debt papers issued for Private Placement with Structural
Obligations by the State and Central Government typically targeted for Trusts
and Provident Funds are distributed by Stock Holding.

Fixed Deposits: Fixed Deposits with high investment rating and issued by
blue- chip corporate are distributed by us. These papers generally offer 50 to
100 basis points more than bank fixed deposits of comparable period. At
present, we are distributing IDBI Suvidha Fixed Deposits and HDFC Fixed
Deposits.
Initial Public Offer: IPO’s offered from blue-chip corporate can be subscribed
from Stock Holding. Issues recently distributed by us are Canara Bank,
Allahabad Bank, Bharti Tele and I- Flex.
List of Mutual Funds
Alliance Capital Mutual Fund
Birla Sunlife Mutual Fund
BOB Mutual Fund
Canbank Mutual Fund
Cholamandalam Mutual Fund
Deutsche Mutual Fund
DSP ML Mutual Fund
GIC Mutual Fund
HDFC Mutual Fund
HSBC Mutual Fund
IL & FS Mutual Fund
ING Savings Mutual Fund
JM Mutual Fund
Kotak Mutual Fund

LIC Mutual Fund
Principal Mutual Fund
Prudential ICICI Mutual Fund
Reliance Mutual Fund
Sahara Mutual Fund
Standard Chartered Mutual Fund
Sundaram Mutual Fund
Tata Mutual Fund
Templeton Mutual Fund
UTI Mutual Fund
4. GOI BONDS
Savings Bonds are issued by RBI on behalf of Government of India in the

following series.
8.0% taxable bonds
These Bonds are held in electronic form in an account called Bond Ledger
Account (BLA). Bond Ledger Accounts can be opened and operated with RBI
designated Receiving Offices. SHCIL has been designated as one of the
Receiving Offices by RBI for this purpose. Subscriptions for Savings Bonds
can be submitted at any of our branches.

Savings Bonds being sovereign in nature are absolutely safe and an attractive
investment option in the current volatile market situation.
The following categories can subscribe to Savings Bonds:
Category of Investor 8.0% (Taxable)
1. Individual
His or her individual capacity.
Individual capacity on joint basis.
Individual capacity on anyone or survivor basis.
On behalf of a minor as father/mother/legal guardian.
2. HUF (Hindu Undivided Family)
3. Charitable Institution
Charitable Institution to mean a Company registered under Section 25 of the

Indian Companies Act 1956
An Institution which has obtained a Certificate of Registration as a Charitable

Institution in accordance with a law in force
Any institution which has obtained a certificate from Income tax Authority for
the purposes of Section 80G of the Income Tax Act, 1961
4. University
University means a University established or incorporated by a Central, State

or Provincial Act and includes an Institution declared under section 3 of the
University Grants Commission Act, 1956 to be a University for the purposes of
that Act

Features
The salient features of the Bonds are listed below:
1. Investment Limit
Minimum investment is Rs.1000 and there is no maximum limit
2. Interest Option
Payable half yearly on 1st Feb, 1st Aug or cumulative on maturity.
3. Tax Benefits
Interest is taxable under IT Act 1961. Exempt from Wealth Tax under
Wealth Tax Act 1957
4. Transferability
Non-transferable, non-tradable and cannot be used as collateral for

borrowings
5. Nomination
Only sole holder or surviving holder can nominate
6. Repayment
Repayable on expiry of 6 years from date of issue. No interest would

accrue after maturity
7. Premature Encashment is not available.
Advantages

 Hassle free maintenance: The GOI Bonds are held in electronic form in
an account called Bond Ledger Account. This ensures smooth
investing minus paperwork.
 Electronic Clearing Services: You can avail of Electronic Clearing
System (ECS) services. This ensures automatic credit of benefits and
redemptions when they accrue.
 Easy access: You can apply for subscriptions into these Bonds in any
SHCIL center across the country.
 Dispatch: Certificate of Holdings is dispatched to the client through
courier on realization of subscription.
Procedure
Subscription is a very simple process. Obtain the application form from any
of SHCIL notified centers across India.
SHCIL officials will assist you in filling up your application form.
Fill up ALL the relevant columns provided in the Application Form. e.g. For
ECS facility, a proof of the ECS Account like Cancelled Cheque / Banker's
Certification authenticating the Account No. and MICR details.
Attach a cheque / draft / pay order in accordance with the series of

subscription you want to make for the requisite amount in favour of “Stock
Holding Corporation of India Ltd. A/C GoI 8.0% Savings (Taxable) Bonds”
A Certificate of Holding will be issued specifying the investment(s) made

under the Bond Ledger Account. The Date of Investment will be the Date of
Realization of the instrument(s).
Documents required
ECS Mandate Documents

Power of Attorney Documents (If appointed
HUF Declaration (for HUF investors only)
Certificate of Identity - for address change and nominee claims
Minor - Birth certificate, Legal or Natural guardian certificate
Form 60 or PAN for investments above Rs.50,000
Charitable Institutions - TDS exemption certificate from IT Department, Board

resolution, Trust Deed
Form 15H (Individuals Claiming Exemption of TDS)
Universities - Incorporation Certificate under Section 3 of the University

Grants Commission Act, 1956
5. INSURANCE
Introduction
SHCIL, a company promoted by Insurance majors & Financial Institutions, is a

Corporate Agent of LIC for Life Insurance products and NIA for General
Insurance products.
SHCIL has a dedicated team of IRDA Certified Insurance Advisors to provide

all services relating to Insurance. We also provide Free Professional advice to
clients on need base insurance.

SHCIL has 100 odd Branches all over India to take care of all your Insurance
related queries and needs.
Features
 An insurance policy compensates you against the financial impact that

can arise following loss, damage or destruction of your property (such
as home or vehicle) or your health or life.
 A fundamental principle of insurance is to put you in the same financial
position after a loss or accident that you enjoyed before the loss. This
is relatively easy with repair or replacement of (say) a car, but is much
more difficult with the loss of a life. The insurance policy is a contract
and like any contract contains clauses and conditions. Claims are
settled in accordance with the conditions detailed in the policy.
 SHCIL distributes Life insurance policies of LIC and Non-Life insurance
policies of NIA.
 The service is available at any of over 100 branches of SHCIL.
LIC products
1. KEY MAN INSURANCE
2. CHILDREN’S POLICY
Komal jeewan plan 159
Jeewan kishore plan102
Jeewan Chayya plan103
3. ENDOWMENT POLICY
Endowment with profits plan14

Limited payment endowment with profits plan48
Jeewan Mitra plan 133
Jeewan Mitra plan 149
Join life (Jeewan Sathi) policy plan 89
4. RETIREMENT PLAN
KEY MAN INSURANCE
Key Man Insurance is an insurance taken by a business firm on life of an

employee (Key Man) whose services contribute substantially to the success of
the business of the firm.
The object of Key man insurance is to indemnify business firm from the loss of
earnings may occur because immediate replacement of the Key Man may not
be possible.
Section 37 (1) of the Income Tax Act ,1961 provides that any expenditure laid
out or expended wholly and exclusively for the purposes of business or
profession shall be allowed as a deduction in the computation of income from
business or profession.
Only Partnership firms and Companies are eligible for Key Man Insurance. If a
Key Man is an employee/officer in the Company /firm, the quantum of sum
Assured will be limited to ten times of annual remuneration paid to the
employee. The value of perquisites can also be considered as part of
remuneration to the extent of 30% of salary for this purpose.
KOMAL JEEWAN Plan 159

Under this children’s plan, the payment of premium ceases on policy

anniversary immediately after the child attains 18 years of age. The plan,
besides offering risk cover, also offers payment of Sum Assured in
installments at age 18, 20, 22, 24 and Guaranteed and Loyalty additions, if
any, at 26 years of age. The close relations such as grandparents, elder
brothers or sisters, uncles both from paternal or maternal side can gift 'single
premium policy' for love and affection under this plan. In such cases also, the
policies will be proposed by father, mother or legal guardian.
JEEWAN KISHORE Plan102
• High bonus from day one.

• Child becomes owner of the policy automatically at the age of 18 years.
• Risk commences after 2 years of policy or on completion of 7 years of
age, whichever is later.
• No medical examination of the child if age is less than 10 years.
JEEWAN CHAYYA Plan 103
• Ideal for parents having less than a year old child.

• Makes provision for education/ marriage of the child.
• Extra benefit of waiver of premium in case of death of the policy holder.
This policy is given under non-medical scheme up to sum assured of Rs.1

lakh, if the prospect is having a child of less than one year of age as on date
of registering the proposal. This non-medical is exclusive for other policies.
ENDOWMENT WITH PROFITS Plan 14
• Moderate Premiums
• High bonus
• High liquidity
• Savings oriented

This policy not only makes provisions for the family of the Life Assured in
event of his early death but also assures a lump sum at a desired age. The
lump sum can be reinvested to provide an annuity during the remainder of his
life or in any other way considered suitable at that time. Premiums are usually
payable for the selected term of years or until death if it occurs during the term
period.
LIMITED PAYMENT ENDOWMENT WITH PROFITS Plan 48
Just as in the case of limited payment whole life polices, here, too, the
payment of premium can be limited either to a single payment or to a term
shorter than the policy. The endowment is, however, payable only at the end
of the policy term, or upon death of the policy holder if it takes place earlier.
If payment of the premiums ceases after at least three years' premiums have
been paid, a free paid-up Policy for an amount bearing the same proportion to
the sum assured as the number of premiums actually paid bears to the
number stipulated for in the policy, will be automatically secured provided the
reduced sum assured, exclusive of any attached bonus, is not less than
Rs.250 Such reduced paid-up Policy will not be entitled to participate in the
profits declared thereafter, but such Bonus as has already been declared on
the Policy will remain attached thereto.
JEEWAN MITRA Plan 133
The benefits of this policy can be considered only for standard and
substandard lives Class I and II. It cannot be allowed for people engaged in
hazardous occupations. Individuals engaged in dangerous pursuits will be
rated against the revised tabular occupational extra rates. This policy covers
the risk for triple the sum assured.
JEEWAN ANAND Plan 149

Jeevan Anand is a With Profit Assurance Plan. It is a combination of the

Whole Life Plan and the most popular Endowment Assurance Plan. The plan
provides the pre-decided Sum Assured and Bonuses at the end of the
stipulated premium paying term, but the risk cover on the life continues till
death.
• Moderate Premiums
• High bonus
• High liquidity
• Savings oriented
JOINT LIFE (Jeewan Saathi) POLICY Plan 89
This policy is issued on the lives of the husband and wife provided the
female's life belongs to Category I or is actively engaged in her spouse's
business. In case of death of one of the policy holder the surviving partner
gets the sum assured, the premium is stopped and on death or maturity full
sum assured along with bonus is paid back.
RETIREMENT PLAN
Its once again that time of the year when most of you are on the look out for
tax saving avenues for investment. And for most, insurance has been on the
top of the list of choices. While earlier, buying insurance was mainly for tax
benefits, but these days with increased awareness, consumers have been
narrowing down on picking up the right policy that suits their future needs.
NIA Products
1. MEDICLAIM POLICY

2. FIRE INSURANCE
3. PRIVATE CAR INSURANCE
4. HOUSEHOLDER’S POLICY
MEDICLAIM POLICY
This insurance policy can be used to protect the insured party against
expenses incurred for hospitalization for illness/ injury/ diseases as well as
domiciliary hospitalization. Suitable for:
• Each and every person aged between 5 and 75 years of age. Children
aged between 3 months and 5 years have to be insured along with
their parents.
• Government or private institutions for their employees.
• Clubs or associations for their bona-fide members.
FIRE INSURANCE
This policy offers protection against loss or damage of property/ materials

caused by fire. The insurance should be taken for a maximum amount of its
current value after considering factors of wear and tear as well as
depreciation.
Suitable for:
This policy is vital for every individual or corporate body with respect to the
property where they have insurable interest. Since insurable interest signifies
the right to insure, the person or corporate body must be legally competent to
enter into a fire insurance contract.
PRIVATE CAR INSURANCE
Riskscovered
This insurance policy protects the motor vehicle from loss or damage

• By fire, lightning, self-ignition, explosion, burglary, housebreaking or

theft.
• Riot or strike.
• Flood, earthquake, cyclone or inundation.
• Transit by road, air, elevators or lifts.
• Liability for third party's injury or death, third party property and towards
the paid driver too.
• Drunken driving.
HOUSEHOLDER’S POLICY
The Householder's Insurance Policy comprises of ten sections covering of the

insured's building, fixtures and fittings, contents, jewellery and valuables,
television sets and VCRs, bicycles, accompanied baggage as well as
personal accident and public liability benefits. Of these ten, the insured party
must opt for at least three sections and section 2 is compulsory.
If the insured party opts for cover for more than 4 sections excluding
compulsory sections, a discount of 15 percent is offered on the Non-Tariff
sections. For more than 6 sections, excluding Sections I and II, 20 percent
discount is offered on Non-Tariff sections.
5. STOCK DIRECT
STOCKdirect has changed the way you look at trading in securities. From
your desktop you can now send instructions for buying/selling shares. Three-
way hands shake between leading brokers, national and international banks
and SHCIL is the crux of STOCKdirect.
STOCKdirect - India's first online trading platform was launched in 1999.

Today STOCKdirect is the most secure online trading platform which

combines encryption technology / digital signature as well as Smart Card

security features.
A few clicks will seamlessly check your funds and security positions, route the
order to the broker of your choice and do the necessary fund and share
movements for you. For people who are not inclined to trading on the net, we
have Request Transmitting Machines (RTMs) placed at specified SHCIL
centres. This is an electronic touch screen kiosk where you can insert your
smart card and trade effortlessly.
Features
 A single instruction enables you to combine your trading, fund and

share transfers with SHCIL taking care of the settlement.
 Trade from home on the Internet with a floppy containing the
STOCKdirect software or use the Smart Card to trade through the
Request Transmitting Machines (RTMs) placed at specified SHCIL
centers and partner banks' designated branches.
 Security measures based on encryption and digital signature coupled
with smart card technology make your online deals 100% secure.
 Open an account with our partner Banks or open a Purchase Advance
account with SHCIL to facilitate your fund transfers.
 Choose the exchange to trade from BSE & NSE.
Advantages
 OneStopShop
Give a single instruction towards funds confirmation for buy orders,
order routing to your broker and fund and share movements for
settlement purpose.
 Convenience
Trade from home through the net or use the RTMs placed at specified
SHCIL centres.

 Security
Digital Signature & Smart Card technology based on 128 bit Encryption
make your transactions 100% secure.
 Cost-Effective
No minimum value of transaction.
 ChoiceofStockExchanges
Buy/Sell shares on BSE / NSE.
Procedure
If you already have a demat account with us, fill up a conversion form to
convert your demat account to STOCkdirect. If you do not have a demat
account, fill up a demat Account Opening form and submit it at any of our
branches.
Register with any of our 77 empanelled brokers by filling up the broker

registration form and submit it along with the account opening / conversion
form.
Open a savings bank account with our partner banks or You have the option
of opening with SHCIL a running account called the Purchase Advance by
remitting an initial advance of Rs.1,000 by way of cash / cheque / DD.
Should you decide to open a Bank account, fill up your bank account number
in the conversion form and submit a photocopy of a cheque leaf from your
cheque book for MICR details
If you have a PC with internet, you can opt for the software option;
alternatively you can opt for the Smart Card option. You may go in for both the
options also.

Within a week of your account opening / conversion, you will be sent an

operating kit containing the following:
-Smart card and/or software.
-Delivery instruction slips.
-Operating manual.
Tariff
• Brokerage
0.50% with a minimum of Rs 50/- per client per broker per settlement*.
Normal ISA charges applicable as per client's tariff scheme. Service tax
applicable as per GOI notifications.
• Media charges (One time charge)
-Smart Card option: Rs 600/-
-Software option: Rs 600/- (Slashed to Rs 100 for a limited time).
-Smart card and Software option: Rs 1000/-
Checklist
You need to be a beneficiary account-holder with SHCIL. You can convert

your existing Demat account into a STOCKdirect account by filling up a
conversion form.

Open a Savings / Current Account with any of SHCIL'S partner Banks. The
minimum balance to be maintained in the Bank account is Rs
1,000/-.Alternately, you can open a running account called Purchase Advance
to facilitate your fund transfers. If you opt for Purchase Advance, The
following conditions apply:
- You make an initial remittance of Rs. 1000/- into the purchase

advance.
- Minimum amount of Rs.250 to be maintained in the Purchase
Advance.
SERVICE PROFILE
Depository participants
Introduction

Our Depository Participant services address your individual

investment needs. With a parentage of leading financial institutions
and insurance majors and a proven track record in the Custodian
business, we have reiterated our past success by establishing
ourselves as the first ever and largest Depository Participant in
India.
Our Depository Participant services address your individual investment needs.

With a parentage of leading financial institutions and insurance majors and a
proven track record in the Custodian business, we have reiterated our past
success by establishing ourselves as the first ever and largest Depository
Participant in India.
From a tentative foray in 1998 into the individual investor arena to servicing
around seven lakh accounts, we have endeavored to constantly add and
innovate to make business a pleasure for you.
Over 100 of our networked branches ensure we are available where you look
out for us.
Across the country, fourteen Depository Participant Machines (DPMs)

connected to NSDL and seven connected to CDSL ensure fast and direct
processing of your instructions.
Our customer-centric account schemes have been designed keeping in mind

the investment psyche of our clients. Your DP account with us takes care of
your Depository needs like dematerialisation, rematerialisation and pledging
of shares.
Matching of your scanned signature on every debit instruction with a digitally

scanned original in our system makes all your trading transactions absolutely
secure. Proactive backup of your instructions prior to execution in the
Depository makes us oblivious to system crashes.

At SHCIL, we place a very high premium on client reporting. Periodic

statements sent to you keep you informed of your account status. Dedicated
Customer Care lines manned by trained staff answer your queries on demat /
trades / holdings. The latest in client response at SHCIL is Interactive Voice
Response (IVR) system for round the clock information on your account.
Registration on our website, SHCIL Interactive, enables you to check your
account-related information, stock market reports and statistics, Corporate
benefits declared by companies, real-time quotes of scrip’s on BSE and NSE
and so much more online.
Open account
Before you open your account……
 You can collect your account opening form from any of our branches or
download it from our site itself.
 As prescribed by Depository bye-laws, accounts have to be opened in
the exact order in which the name(s) appear on the share certificate.
 Remember that Holding pattern A B is not the same as BA. However,
minor differences like abbreviations, spelling mistakes can be ignored
provided signatures recorded with the registrar / company is the same.
Get your account opening from details right.
 All columns are filled in. Write NA wherever not applicable.
 Bank account number with complete address and 9 digit MICR

numbers are filled correctly. This will facilitate effective disbursement of
monetary corporate actions into your account.
 Signature of account holders are always in black.

 In case of Power of Attorney, Power of attorney holder has to sign at all

places in lieu of the holder. Certified copy of the POA has to be
provided along with the account opening forms.
 If you would like to receive credit of shares purchased directly into your
account, mark standing instruction as 'Yes'.
Your account is opened.
Once your account is opened, you will be allotted a client identity number.
You will be sent an operating kit containing:
 Details of your account as recorded by SHCIL.

 Copy of the agreement entered into with SHCIL.
 "Delivery instruction by client" booklet allotted to your demat account.
This booklet helps you transfer shares from your account to broker
account and other accounts.
 Now you are ready to operate your DP account.
Maintenance
 Change in permanent/correspondence address
A request letter ( format available on the site) signed by all the holders is
required Along with this Photocopy of proof of identification and proof of new
address is required. Please also bring the originals with you for verification
purpose. Client or the authorized bearer can visit our branch for the same.
Copy of the latest transaction statement received from SHCIL is also required.
 Change in signature
Request letter (format available) signed by the client. The new signature to be
attested by the bank. The request may be submitted along with the copy of

POI and the photocopy of the latest transaction statement received from
SHCIL.
 Addition of PAN/Mapin
Request letter signed by the client giving the PAN/Mapin number.
 Accounts with Power of Attorney
These accounts can be operated by both the client and the POA Holder. In
case the client has given the POA in favour of 2 or more persons, then the
mode of operation of the POA holders is also to be mentioned. In case the
power of attorney is to be revoked, a letter signed by the client is required.
 Change of Telephone Number
Request letter signed by all the holders, with a photocopy of the recent
telephone bill and proof of identification of one of the holder.
 Instruction by Fax
Clients may avail this facility by faxing their delivery instructions to SHCIL, by
executing the fax indemnity.
 Change in Standing Instruction
For recording any change in the standing instruction (for receiving direct
credits) in the demat account, we require a letter signed by all the holders.
 Change in Power of Attorney Details
If you have given POA details and you wish to operate the account yourself,
the POA has to be revoked by you in writing.
Death of Beneficiary account holder(s) - Transmission of account

Transmission of account takes place in the event of death of the beneficiary

account holder(s). There can be three situations in transmission of account.
See which category you fit into and follow the relevant procedure:
- When the account has joint holders and one of the holder dies.
- When the account has a sole holder with a nominee.
- When the account has a sole holder without a nominee.
If the shares are transmitted to beneficiary accounts of surviving holders and

this beneficiary account is in a DP other than SHCIL.
o Classify the transmission case into the above categories.

o Over and above the documents explained above, the
client master list from the target DP has to be submitted.
 Freezing of account
An account is frozen/suspended
- Only on your instruction.

- By competent authority i.e. by the Depository / SEBI.
- On receipt of court order.
 Defreezing of account
Defreezing of an account takes place,
- Only on your instruction.

- For defreezing pledge accounts, your instruction has to be
accompanied by bank authorization.

Demat
Dematerialisation is the process of conversion of shares from physical form to

the electronic mode. Our dedicated demat team enable you to convert your
physical holdings into electronic mode in a quick and hassle-free manner.
As per SEBI, scrips can be divided as:
 Scrips eligible for demat.
These scrips can be traded either in physical or electronic form.
 Scrips falling under compulsory demat.
These scrips can be traded only in electronic form.
 Scrips falling under transfer cum demat.
In this category, the shares purchased by you in the physical form can be sent
to the Registrar / Company for transfer and dematerialisation at the same
time.
 Submit Demat Request Form
Once your demat account is opened with us and you have received your
client identity number, you can start dematerialising your shares. You can
submit the shares over the counter at any of our branches. Do go through the
tips given on filling up the DRF to avoid rejection.
Your shares are dematerialized
 When the company gives you credit, these shares will reflect under
"free" column. Now you can sell these shares. In case the company is
not satisfied with the details furnished, it will reject the shares.

 If your shares have been rejected by the company, SHCIL will forward
the shares to you on receiving them from the company.
Direct Demat
Transfer cum Demat or Direct Demat is a process wherein the shares

purchased by you in the physical form can be sent to the registrar / company
for transfer and dematerialisation at the same time.
What you need to do
 Send the physical certificates along with duly executed Transfer Deeds
to the company / Registrar indicating your intention to directly demat
the shares after transfer.
 The company upon effecting the transfer will send you a letter
containing details of the share certificates.
 Submit this letter with a duly filled DRF to us well within the specified
date mentioned in the letter. If the letter does not reach the company /
registrar before the specified date, the Company / Registrar dispatches
the physical certificates back to you.
What happens in Direct demat
Based on guidelines issued by SEBI, the procedures for transfer cum demat
is as follows:
 Firstly, you will send the physical certificates along with duly executed
Transfer Deeds directly to the company / Registrar indicating your
intention to directly demat the shares after transfer.
 The company / registrar, upon effecting transfer will send you a letter.
This letter will contain all the details of certificates such as folio No. ,
certificate no, Distinctive Range Number (DNR), etc.

 The certificates will be retained by the company / registrar. You will fill
the demat particulars in the DRF, attach it with the letter sent by the
company and submit the same to us.
 The letter also specifies a date by which the letter needs to be

returned to them. You will have to submit the DRF along with the
company letter to us before the specified date.
 If the letter does not reach the Company / Registrar before the
specified date, the Company / Registrar despatches the physical
certificates back to you.
 We at our end process this letter in lieu of certificates and create a
DRN and forward the same to the company / registrar along with the
DRF submitted by you.
 The company gives credit against the DRN on receipt of the DRF and
ensures defacing of certificates at their end.
 The defacing of certificates at the company's end is very crucial to
ensure that the certificates are not re-circulated and misused. Hence
Transfer cum Demat procedure is admissible only in case of
companies identified by NSDL and categorized as eligible for direct
demat. NSDL permits companies after due certification by auditors on
the internal controls in place at the company.
Pledge
You can pledge or hypothecate your dematerialised shares against loan or

credit facilities extended by a pledgee who also has an account with a DP
The pledge procedure
 Pledgor fills in a form requesting the DP to pledge shares and hands it

over to the DP

 If the form is complete in all respects, the DP processes the form and
generates a pledge / hypothecation instruction number for the request
 Securities to the extent of the instruction are debited from the free or
locked-in balances and credited as pledged balances of the pledgor so
that they cannot be used for any transactions
 The pledgee will submit a form to its DP to accept / reject the pledge /
hypothecation request
 If the pledgee accepts the request by the pledgor, the acceptance is
communicated electronically to the pledgor's DP. Once the pledgee's
DP confirms the acceptance of the pledge, the pledgor cannot cancel
the pledge / hypothecation order. The pledgee's DP executes the
pledge / hypothecation request as per the instructions given
 In case the pledgee rejects the pledge request, the pledgor's DP is
intimated electronically. Now the securities which were earlier credited
as pledged balances will be credited to free / locked-in balances
 Once the loan is repaid by the pledgor, the pledgor initiates the closure
of the plegde. The request for closure is transmitted electronically to
the pledgee's DP. The pledgee's acceptance / rejection of the request
for closure of pledge is transmitted electronically to the pledgor's DP
 If the pledge is closed, the securities will be reflected as free / locked-in
balances
 In case the pledgor defaults in repaying the loan to the pledgee, the
pledgee instructs his DP to invoke the pledge / hypothecation.
Reports
You get the following information at your doorstep:
 Transaction cum billing and holding statement if there has been a

transaction in the account
o Weekly for traders
o Monthly for others

 The transaction cum billing and holding statement will have the
following details :
o Details of transfers executed

o Confirmation of dematerialisation / rematerialisation requests
o Rejection of dematerialisation / rematerialisation requests
o Movement of securities
 Movement of securities on account of pledge creation / closure /

invocation.
 Information of allotment details in case of primary market issues
 Quarterly holding statement if there is no transaction in the account.
Tariff
1 Annual membership charge Rs. 500/-

2 Purchase (market and off market) Nil
3 Sale (market and off market) 0.05% (min. Rs.25/-)
plus NSDL/CDSL
charges
4 Custody charges NIL
5 Dematerialisation Rs.3/- per certificate
6 Postage per demat request Rs. 25/-
7 Rematerialisation Rs. 25/- per certificate
8 Postage per remat request Rs. 25/-
9 Creation/confirmation of creation of pledge 0.02% plus NSDL /
CDSL charges
10 Closure/confirmation of closure of pledge 0.02% plus NSDL /
CDSL charges
11 Invocation of pledge Rs. 50/- per txn.
12 Late transaction charges (per txn.) Rs. 10/-
Payment option
 Client pays an Imprest of Rs.1000/- per depository account, which will

be adjusted against depository charges. The Imprest option is payable

by cheque/cash and is non-interest bearing. The client undertakes to

replenish the balance before it falls below Rs.250/-.
 Client authorizes SHCIL to collect the dues through ECS facility
Clearing member
Introduction
SHCIL's long-standing association with Clearing Members has

enabled it to develop services based on an understanding of their
working and their requirement for timely and accurate information.
We accept deposits of base capital and Additional base capital requirements

stipulated by NSE for clearing members trading on its capital market segment.
Besides, our new products with a broker empanelment clause ensure a
mutually beneficial tie-up. Clearing members stand to earn a steady income
from our product transactions and new adds to their client-base, while we
capitalise on their rapport with the market.
We currently offer Depository services to more than 680 clearing members of

various exchanges connected with NSDL and CDSL. Our Customer Care
lines answer all your DP queries while the Interactive Voice Response (IVR)
system gives you information on your account and other valuable data like CC
calendar details, tariff, ISIN information, etc. via telephone, fax and e-mail.
Advantages
 For Institutional & Retail clearing members We have customised tariff

for clearing members benefiting
o brokers having very high average trade value
o brokers with big retail clientele
 Special tariffs for :
o CM Principal Accounts

o NSCCL CM Accounts
o Unified Settlement Pool Accounts on CDSL.
 Our Customer Care helplines give timely and accurate information to

CMs. The Interactive Voice Response (IVR) system at SHCIL gives
round the clock information on holdings & transactions, Pay in / Pay out
details, overdue cum holding details, etc. via telephone, fax or e-mail.
 Updated Transaction Statements are available on the website FREE of
any charge whatsoever. Members have a choice of accessing their
statements date-wise for the last one month or settlement-wise for the
same period. Current trading day transactions are also made
available , updated to the hour.
 Besides the transaction statements, the Delivery-Out report, which is
an extremely critical report for Clearing Members, is also made
available on the website, updated to the hour.
Open an account – Requirements
 In case of Proprietor's account, if authorised signatory is a person other

than the account holder, then Power Of Attorney is to be submitted by
Proprietor giving authority to that person.
If you are shifting from another DP If you are opening a fresh Pool
to SHCIL account .
Account opening form Account opening form
• Board resolution • Board resolution
• Memorandum Of • Memorandum Of
Association Association
• Authorized
• Authorised Signatories (for
Signatories (for
corporates)
corporates)

SEBI Registration Certificate clearly SEBI Registration Certificate clearly

indicating that it is for stockbroker. indicating that it is for stockbroker.
• Closure Letter addressed • Letter from Stock
to old DP duly stamped Exchange stating CC
and acknowledged by old CM ID.
DP. • In case of ISE
• Closure letter and Shifting mention on the letter :
letter has to be on the
Subject : Allotment of CC
letterhead of CM
CM ID
• Closure letter should be
duly stamped and
acknowledged by old DP.
Shifting Letter addressed to NSDL

stating :
• CM Name
• old CM BP ID
• old DP Name
• New DP name.
Custodial services
Custodial services for Base Capital / Additional Capital requirements
 We accept deposits of Base Minimum Capital (Base Capital) and

Additional Base Capital as stipulated by NSE for clearing members to
be able to trade on its capital market segment.
The securities being deposited shall be subject to legal and beneficial

ownership of:
 TM clearing member / spouse in case of individuals

o Any of the partners / their spouses in case of partnership.

o Any of the directors in case of corporate TM clearing member.
 The following securities can be deposited to qualify as
deposit :
o Listed equity shares of approved companies

subject to 15% margin
o Equity shares of Approved companies in demat
form subject to 15% margin (Nifty Scrips) and 25% margin (30
other scrips pertaining to Junior Nifty group)
o Listed units of mutual funds subject to 15% margin
o Unlisted units of mutual funds subject to 15%
margin of the NAV of the units prevalent on the last day of the
preceding month
o Listed PSU bonds subject to 15% margin
o Other debt securities admitted for trading on
Wholesale debt market segment of NSE subject to 15% margin
o Listed GOI / Treasury bills subject to 10% margin
o Units under Unit Scheme 1964 of UTI to be valued
at the lowest of the repurchase prices prevalent in the preceding
12 months
o Deposit of Fixed Deposit Receipts (FDRs) issued
by approved Banks. In case of FDRs, the members have to
submit the following:
 A Letter from the Bank in a specified format.
 A Letter from the Member in a specified
format
 SHCIL Charges upfront
 National Savings Certificate and Kisan
Vikas Patra issued by Post office,
 SGL Securities,

 Certificate of Deposits (CDs) issued by

Banks / Institution.
o NSE members may also pledge dematerialised
shares in favour of NSCCL for security Base Capital and
additional base capital requirements. The demat shares pledged
by a member as additional base capital will be considered for
the purpose of gross exposure computation. In case of demat
scrips, the following conditions apply:
 The member has to open a separate

beneficiary account for Base Capital and
Additional Base Capital
-Closure of pledge takes place at the

instruction of NSCCL Replacement /
Addition of securities also available
-in the name of Corporate / Directors

of the Company in case of Corporate
clearing members
-in the name of Proprietor / spouse in

case of Proprietary concerns,
 The securities to be pledged to be

transferred to the account. Pledge
Instruction along with pledge deed in
specified format to be given to SHCIL
 After pledge is created in favour of NSCCL,
valuation is given to NSCCL by SHCIL
 Closure of pledge takes place at the
instruction of NSCCL Replacement /
Addition of securities also available

Reporting
Among the host of Reporting features offered by SHCIL, the notable ones are
 Online Transaction updates during the day.

 Online date-wise transaction reports, settlement number wise reports
etc
 Online redressal of queries through email

 Intimation of failed trades
 Settlement wise holding statements after payout
 Faxes / Emails on specific request
 DO Reporting
Some of these highly specialized reports are provided to you ONLINE and
FREE only by SHCIL.
Derivatives
Introduction
SHCIL is a Custodian/Professional Clearing Member of derivative

segment at the Bombay Stock Exchange and at the Futures &
Options Segment of the NSEIL respectively.
We have developed in-house Back Office systems and procedures to cater to

the needs of various entities in the segment. A dedicated team of
professionals handle derivative operations and assist its clients.
As a professional clearing member, SHCIL performs the following functions:
 Clearing - Computing obligations of all his TM’s i.e. determining

positions to settle.

 Settlement - Performing actual settlement.

 Collateral Management - Collection of collateral (cash/cash equivalents
and securities), valuation on a regular basis (as per J. R. Varma
recommendations) and setting up exposure limits for TMs and
Institutional clients.
 Risk Management - Setting position limits based on upfront
deposits/margins for each TM and monitoring positions on a
continuous basis.
Advantages
SHCIL has always been a pioneer in clearing and settlement services in the
cash segment at both the exchanges. SHCIL has the capability to handle
large volumes of business with greatest accuracy, keeping customer interests
as the top priority.
SHCIL in it’s endeavor to serve various entities in the derivatives segment has
developed indigenous solution keeping in view the strict regulatory
requirements.
 Privacy of each TM’s operations strictly maintained :SHCIL being a

professional clearing member has no trading interests in the derivatives
segment. There is strictly no dissemination of information on trading or
any other operation of any of its clients.
 One-point contact for all the activities :SHCIL’s Derivatives segment is
centralized and all operations are handled by an exclusive derivatives
team.
 Dedicated team of professionals to handle Derivatives operations:
SHCIL has a well-trained team of professionals supported by best
systems, to handle derivatives operations at NSE and BSE. Clients can
approach the team for troubleshooting, conceptual understanding or
any other operational issue related to derivatives trading.

 Tie-up with banks having nation-wide reach for banking

activities :Since settlement in derivatives trading takes place daily.
Funds movement has to be fast. SHCIL has tie up with banks (HDFC
Bank, ICICI Bank, GTB, IDBI Bank, UTI Bank, Canara Bank etc.)
having wide reach and modern facilities like TT/anywhere banking etc.
to contain the time lag in banking transactions.
 Network of more than 130 branches to support outstation clients:
SHCIL has nation wide reach with its 130 plus branches across the
country to support outstation clients. SHCIL’s branches are geared up
to provide derivatives clearing and settlement services to trading members

operating from respective branches.
 In built checks and controls: SHCIL has indigenously designed

systems that take care of the stringent regulatory requirements for
derivatives trading in India.
 Collateral Management: SHCIL has excellent system to manage
cash/cash equivalents/securities deposited as collateral for derivatives
trading. Clients are informed as and when expiry of any instrument
approaches. Securities are transferred in minimum possible time.
Corporate actions on securities are monitored and clients are being
informed accordingly.
 Support from Institutional participants: SHCIL being a custodian
clearing member having major institutional clients like UTI, IDBI etc.
who are also promoters of SHCIL, provides more credibility to its
clients.
 Competitive service charges: SHCIL is the pioneer in introducing
Derivatives Clearing and Settlement services in the country. To
promote derivatives trading, the service charges are designed not
become a hindrance for anybody entering this market.
 More leverage: There is no need to block assets worth Rs. 50 lakh as
initial margin deposits with exchange. Instead a Trading member can

take huge exposures by investing the same amount through a PCM

like SHCIL.
 Low investments: Derivatives trading require complying with stringent
regulatory requirements and huge investment in back office systems
for a Clearing Member. By choosing a PCM like SHCIL, a trading
member can start trading with very little investment in back office
systems since a PCM takes care of the back office activities.
 Institutional Advantage: Advantage of trading for institutional clients. A
trading member can execute institutional orders without shrinking his
own exposure limits as institutional trades are confirmed online by the
respective PCM.
 Confidentiality of Trades: Since SHCIL has no trading rights, the
business details of a trading member are not likely to be misused
.There is no overlapping of business interests.
 Focus: Due to highly competitive nature of the market, SHCIL’s service
charges are normally very low and it makes more business sense for a
TM to outsource the clearing and settlement activities and focus on the
core business of trading.
Open an account – Requirements
 Agreement: The TM has to sign an agreement with SHCIL to clear his

trade in the format prescribed by NSE/BSE and suitably modified by
SHCIL. The agreement has to be signed before the TM begins his
trading. A copy of the CM-TM agreement will be forwarded to
NSCCL/BSE along with the agreement the trading member should also
submit :
o Board Resolution appointing SHCIL as clearing member
o Attested copy of Memorandum & Articles of Association
o Copy of SEBI registration certificate
 Consent: At the application stage, a TM must mention that Stock
Holding Corporation of India Ltd. (SHCIL) will clear his trades.

o Letter of consent from SHCIL can be obtained, which the

TM has to forward to BSE/NSE as the case may be.
 Application Form: An application form, provided by SHCIL, to be filled

by TM, giving details of addresses, phones, accounts etc. Approved e-
mail addresses should be mentioned in the application for receiving
daily bills.
 MARGINS: Trading Members have to deposit margins with the
Clearing Member for the purpose of taking Exposure on the Exchange
and for daily settlement. At SHCIL, there are two components of
Margins i.e. initial margin (IM) for exposure and maintenance margin (MM)
for daily settlement.
Initial Margin(IM)
minimum Rs. 10 lakh as initial margin (IM) in either of the following ways:
o entire Rs. 10 lakh in cash OR

o Rs. 2 lakh in cash and Rs. 8 lakh as cash equivalent * OR
o Rs 2 lakh in cash, balance Rs. 8 lakh as a combination of cash
equivalent * and specified demat securities (subject to maximum of
Rs. 5 lakh after valuation)
Note: The above proportion is valid for NSE. For BSE minimum cash
requirements are Rs.2.5 lakh. BSE Members can start trading with Rs 7.50
lakh(Rs.2.5 lakh in cash, balance Rs. 5.00 lakhs as a combination of cash
equivalent and specified demat securities (subject to maximum of Rs. 2.50
lakhs after valuation)
Maintenance Margin (MM)

A trading member has to deposit a certain percentage of initial margin (IM) in

cash only towards his daily settlement of marked-to-market margins,
premiums or any other charges payable by the TM.
Initial Margin(IM) ** Maintenance Margin (MM)

More than or equal to Rs. 50 10% of initial margin in cash only ***
lakh
Less than Rs. 50 lakh 20% of initial margin in cash only
* Cash equivalent includes Bank guarantee, fixed deposit receipts or govt.

securities (As per J R Varma Committee report on derivatives)
** The specified initial margin range should be for a period of at least one
continuous month
*** Subject to bank operating powers and banker’s certificate on credit limits
for the bank account
Reporting
SHCIL provides various reports relating to the trading and settlement of its
clients on its website .These reports can be downloaded by the client by using
a unique PIN number and password. The main reports that are provided are :
 Daily trades reports

 Marked-to-market profit/loss reports
 Collateral margin reports
 Account statements
 Outstanding position reports
 Span margins requirement report three times during the day based on
the parameters specified by the exchange
 Monthly ledger reports and any other relevant report required by a
client is also provided.
Non-resident Indian
Introduction

Over the years, SHCIL has grown to become a major player in the
capital market. With a network of more than 120 offices operating
across the country and franchisees operating abroad, SHCIL
provides Depository Participant and related services close to 0.7
million satisfied investors out of which over 6000 are NRI Clientele.
SHCIL has a full fledged NRI cell operating specifically to cater needs
pertaining to Depository account opening and maintenance. NRI cell co-
ordinates with prospective NRI customers, collects and assists in obtaining
the relevant documents and ensures the Depository Account is opened hassle
free.
NRI Cell collects physical certificates to be sent for demat and ensures that
the certificates are in order and can be sent for dematerialisation under the
existing guidelines issued by the depositories. Instructions for trade are
accepted by fax on request by NRI Cell to ensure timely settlement of trades.
In this case later on the client needs to regularize by sending the original trade
delivery instruction. Any tariff and billing related query are addressed by NRI
Cell. In short NRI Cell is a single point contact for any matter relating to NRI
Depository operations.
Open account
Before you open your account….
 Ascertain your NRI Depository Account status as per guidelines issued

by RBI from time to time.
 In case of Joint Account, status of the first holder is reckoned for all
purposes.
 If scrip is held by three holders of whom the first is a NRI and the other
two or residents, then the account falls under NRI category.

 Accounts have to be opened in the exact order in which the names

appear on the certificate. Holding pattern A B is not the same as B A.
Get your account opening form details right….
 All columns are filled in. Write NA wherever not applicable.

 Specify status as Non Repatriable (NRO) or repatriable (NRE). Status
cannot be changed once account is opened.
 Bank account details should be compulsorily provided along with 9 digit
MICR code
 Ensure that the account status and bank details are as below :
o If the status is NRE, bank details can be "NRE' or 'NRO'.
o If the status is NRO, bank details can be 'NRO' only.
 Copy of RBI approval is not mandatory and the standing instruction for
automatic credits may be marked as 'Y' without furnishing RBI
approval. However, the onus of reporting to RBI is on the client.
 Proof of identity by way of Copy of your Passport and Bank Account
attestation is compulsory.
 Initial the agreement on the front side and sign in the order of holders
in the backside of the agreement
 Where the account is being opened by POA(proof of address)
o The POA shall sign at all places in lieu of the original holder(s).
However, the photographs will be those of the original holder(s)
only.
o A certified true copy of the POA has to be provided with the account
opening form along with the signature and photograph of the POA.
o The account may be operated either by the original holder or by the
POA.

 Nomination
o Nominee may be any person other than the account holders.

o Photograph of the nominee has to be affixed on the nomination
form.
o The nominee must sign across the photograph and in the space
provided below.
o If the nominee is a minor, the guardian shall sign at all places where
the nominee is supposed to sign.
o Photograph of the guardian also has to be affixed on the nomination
form.
Custodial
Introduction
Since its commencement in 1988 as the first dedicated Custodian in

the country, SHCIL has been providing Custodial Services of
international standards to Domestic Mutual Funds, Financial
Institutions and Foreign Institutional Investors.
With almost 70% of the Institutional business in its fold, SHCIL has evolved
over the times to meet the changing requirements of dynamic markets and
demanding clients.
A dedicated pool of trained and highly experienced professionals work literally

round the clock on state of the art computer systems, dedicated
communication channels, well connected to Client institutions, Stock
Exchanges, Clearing houses, Depositories and leading Institutional brokers.

In terms of collective man-years, SHCIL has the most experienced team in the
entire Industry.
Trade processing services
SHCIL has specially trained personnel handling thousands of trade

instructions involving large values on sophisticated systems using digital
signature on STP (Straight Through Processing) systems, ensuring smooth
trade confirmations to Stock Exchanges, reporting and resolution of
mismatches with Clients, etc.
Settlement services
Institutional trades are either settled through the Clearing House of the Stock
Exchanges or as DVP directly with the contracting broker or Counter Party. As
a Custodian SHCIL strives for timely settlement of Funds and Securities.
Funds are collected/ deposited from/to client and settled with the Clearing
Houses/ Brokers/ Counter Parties.
In the present context, most of the Institutional trades are settled in the
Depository mode. For the Institutional segment alone, SHCIL has a unique
clearing code on the two principal stock exchanges and separate DPM units
on both NSDL and CDSL.This ensures smooth settlement of transactions on
both Exchanges/Depositories, based on the deliverables and receivables
received by them for each settlement.
For the occasional delivery and receipt of securities in the physical mode,
SHCIL ensures prompt scrutiny, processing and lodgment of securities with
the respective Company/Registrar and Transfer Agent, with the objective of
final transfer to the purchaser, with objections handling if needed, thus
facilitating delivery of securities to the parties concerned on sale.
Physical custody services

The transferred physical securities, when received, are held in state-of-the-art,

high-security vaults on behalf of the clients. A pioneer in introducing the bar-
coding system to track certificates, SHCIL ensures the availability of each and
every share certificate at a moments notice.
Institutional DP services
SHCIL has installed dedicated DPM’s (Depository Participant Modules) on

both the Depositories, viz. NSDL (National Securities Depository Ltd) and
CDSL (Central Depository Services Ltd).
A dedicated Institutional DP team at SHCIL addresses your need for all core
DP services like conversion of physical holdings into electronic form,
settlement of trade instructions, rematerialisation, repurchase and pledge
instructions, providing of holding and transaction statements and daily
reconciliation of client holdings.
SHCIL also provides special services like providing dematerialisation and

corporate action follow-up, saleable holding reports used by many fund
managers, monitoring of CP Redemptions, prepayments and providing
customized reports like put/call forecasts and non equity holding reports.
Corporate Actions, Primary markets and related services
The Corporate Actions team ensures timely collection of monetary and non-
monetary benefits on behalf of the client. It covers all activities relating to
Corporate Actions like calculation of entitlements, reconciling with
companies/registrars prior to due date, collection of monetary Corporate
Actions from the premises of the company/registrar and transfer of the same
to clients. In case of any shortage, active follow up is done with each
company. Customized reporting to clients on the status of Corporate Actions
is done periodically.

This team is supported by a highly specialized ‘Databank’ team, which is

unique to SHCIL. This team tracks over 8500 Companies, over 12000 issued
securities, 2500 Registrars, besides all relevant information available in all
main stock Exchanges and Depositories. The team ensures prompt
availability of information on all Corporate Announcements, ISIN listings etc to
the Corporate Actions team.
The Primary Markets team takes care of applications on behalf of clients for
primary market issues, calculates the entitlements, follows up for allotment or
refunds and sends customized reports to clients.
Client relationship management
Every Institutional client is assigned to an experienced Manager with a

dedicated team whose sole task is in resolving special issues relating to the
client. This team acts as a single point contact for all Client matters. They also
ensure standardized and highly customized reports to clients at desired
intervals.

Swot analysis
SWOT ANALYSIS
STRENGTHS:
1. SHCIL is the first depository participant. It has the opportunity of
holding more than 7000000 accounts at all centers.
2. Multiple products and services: SHCIL provides a variety of services
under the same roof.
3. It is the member of both NSDL and CDSL.
4. The company has more than 100 branches all over the world. It is very
much accessible to the clients.
5. The company has highly computerized, state of art technology to
facilitate the business and minimize the risk from automated
operations.
6. The company has to its credit 70% of the institutional business.

7. The company is blessed with a trained pool of professional staff and

very good customers.
8. The employees are assigned to different departments on rotation basis.
This results in a pool of staff that will always be ready to replace others
in case of their absence.
9. Since the main business of the company is providing DP services,
unlike the service provided by banks it leads in specialization.
10. The variety of services offered has enabled SHCIL to have a much
more competitive edge about financial services than its competitors.
WEAKNESS
1. Improper or insufficient credit collection procedure, which has resulted
in a large amount or receivables.
2. The clients are not provided any incentives or motivations, which would
encourage them to make timely payment.
3. The company has not undertaken sufficient steps to create awareness
among the clients about SHCIL. The only procedure adopted is the
Internet.
4. The company has also failed in creating awareness among the clients
regarding the necessity of updating the information with regard to their
address, which makes some of the services rendered by the company
futile.
5. The HR department is placed in Mumbai. So the newly recruited
employees lack sufficient training facilities.
OPPORTUNITIES
1. The company can take steps to increase the awareness among the
clients and thereby increase the business.
2. The company has regularly come with new products and services in
order to proceed ahead of its competitors.
3. The company can attract more number of franchises.

THREATS
1. The number of competitors is increasing at a higher rate. Their charges
are also low when compared to the charges of SHCIL. The nearest
competitors are banks providing DP services along with their regular
services.
2. The company does not charge any amount for closing the account.
Since retaining the customer is very important and most of the
customers will not think of closing the account at time of opening the
account the company can charge some for closure.
3. The discounts and offers given by other DP’s when compared to offers
of SHCIL are leading to reduction in the number of clients.

Methodology
Methodology
Type of research Descriptive and Exploratory

research.
Sampling technique Non probability sampling.
Sampling size 50
Sample description Canara Bank, Bangalore stock
exchange, ICICI, IL&FS, UTI,
SHCIL.
Instrumentation technique Interview, questionnaire
Sources of data collection Primary data was collected by
conducting Interview and
secondary data was collected
from magazines, books, and

internet.
Software used for data analysis MSexcel
It is a survey method. The questionnaire and interview schedule, personal

interview will be relied upon for gathering primary data. An aggregate of 40
respondents from various Depository Participants responded to the
questionnaire.
For the purpose of secondary data books, articles, reports, annual reports
of the stock exchanges, news papers, CD-ROM, Internet, Nifty, BSE, BGSE,
are planned to be used.
Analysis &
Interpretation
ANALYSIS
The researcher used a structured questionnaire for eliciting the required

responses relating to Depository Services at SHCIL.
50 respondents were approached for this purpose, out of which 40

respondents co-operated with the researcher in filling the questionnaire.
The various responses were classified, and tabulated. A simple statistical

analysis was made by the researcher.
An attempt is made to present the analysis covering different aspects of

Depository Services at Stock Holding Corporation of India Limited.

1. Table showing the age group of respondents
Age (In years) Frequency %
20-30 8 20
30-40 12 30
40-50 16 40
50 & above 4 10
Total 40 100
Table No: 1
Graph showing age group of Depository Holders
45
dents
40
35
30
Graph No: 1
Analysis: From the above table we can see that the normal range of
Depository Holders age varies between 20-50 yrs, with the highest 40% falling
between 40-60 followed by 30% falling between 30-40 and 20% between the
age group 20-30 and the lowest is 60 & above.
Inference: 40% of brokers and investors fall in the age group 40-60yrs.
2. Table showing the number of respondents investing in shares
Particulars Frequency %
Yes 32 80
No 8 20
Total 40 100
Table No: 2
Graph showing the Number of share holders

20
yes
no
80
Graph No: 2
Analysis: From the above Graph it can be analyzed that 80% of the
respondents are Stock Holders. Remaining 20% of the respondents are not.
Inference: 80% of the respondents are the stock holders.
3. Table showing the No. of years holding & trading in SHCIL.
Years Frequency %
0-5 16 40
5-10 12 30
10-15 8 20
15-20 4 10
Total 40 100
Table No: 3

Graph showing the No. of years the respondents holding and trading in
SHCIL
40
35
30
Graph No: 3 25
Responde
20
Analysis: From the above it can be analyzed that the company has been
nts
grown well from past 5 to 10 yrs. 30% of the people are trading from 5-10
years & 40% from 0-5 years.
15
Inference: 40% of the Depository Holders are trading between 0-5 years.
10
4. Table showing how secure the securities in opting the demat.
Particulars Frequency 5
Percentage
Excellent 24 60
Very Good
Good
8
6
20
15
0
Average 2 5 0-5yrs
Total 40 100
Table No: 4
Graph showing the degree of securities in Demat Account

60 60
50
40
Graph No: 4
30
Analysis: From the above table survey inferred that 60% of the Depository
Holders are giving their consent as excellent about Demat. That is the
20
securities of the shareholders in electronic form is more safe and secured. 20
Inference:
10
Dematerialization plays a major role in providing safety and
security to the holders.
0
Excellent
5. Table showing the most preferred DP Product
Very
Particulars
Broking/Internet
Frequency
8
Percentage
20 Good
Trading
Mutual Funds 16 40
Government Bonds 8 20
Insurance 8 20
Total 40 100
Table No: 5
Graph showing the most preferred DP Product

40 40
30
20 20
20 20
10
Broking/Interne
ernet Trading
Mutual Funds
Govt.Bonds
0
Insurance
t
Graph No: 5
Analysis: The above survey reveals that 40% of the holders are interested to
invest their savings in Mutual funds because they are less risky. The
Government bonds, Broking, & Insurance constitute the next preferred DP
product.
Inference: Majority of 40% of holders are interested in Mutual Funds.
6. Table showing the source in which the information is available

regarding SHCIL
Particulars Frequency Percentage

Newspaper 4 10
Magazines 4 10
Word of mouth 16 40
Internet 16 40
Total 40 100
Table No: 6
Graph showing the source in which the information is available

10
10 Newspapers
40
Magazins
Word of mouth
Internet
40
Graph No: 6
Analysis: From the above survey it is revealed that the information about the
SHCIL is more effective through Internet and Word of mouth, i.e. the 40%
from Internet & 40% from Word of mouth, 10% is followed by Newspapers &
10% by Magazines
Inference: Internet constitute the largest source of SHCIL related

information..
7. Table showing the selection of stock exchange to traded by both

shareholders and brokers.

NSE 20 50
BSE 20 50
TOTAL 40 100
Table No: 7
Graph showing the selection of stock exchange to trade by the

shareholders

50 50
50
40
30
20
10
0
BSE NSE
Graph No: 7
Analysis: From the above survey it is clearly inferred that 50% of

shareholders are using BSE for trading and also remaining 50% are trading in
NSE.
Inference: Both NSE & BSE are equally preferred for trading purpose,
accounting for 50% each of the responses.
8. Table showing the attribute of services expected by the investor

Quality of Service 8 20
Market Updates 8 20
Returns Provided 12 30
Safety & Security 12 30
Total 40 100
Table No: 8
Graph showing the attribute of services influences the investors
30
25
Graph No: 8
Analysis: From the above table it can be inferred that equal number of
respondents i.e. 30% each consider Returns and Safety as important
attributes followed by other attributes such as 20% each consider Quality of
service and Market updates.
Inference: Safety & Security, Returns constitute the most preferred

attributes.
9. Table showing areas of investment that most investors prefer in

SHCIL

Equity Shares 16 40
Mutual Funds 12 30
Bonds 8 20
Others 4 10
Total 40 100
Table No: 9
Graph showing areas of investment that the most investors prefer

40
40
35
30
30
25
20
20
15
10
10
5
0
Equity Mutual Bonds Others
Shares Funds
Graph No: 9
Analysis: Majority 40% of the investors are having the habit of investing in
the Equity shares, 30% of them have invested in Mutual funds and 20% are
invested in Bonds & 10% in others.
Inference: Equity shares are the best options for investment in which
investors are preferring it first.
10. Table showing whether SHCIL provide Tailor made services
Yes 16 40
No 24 60
Total 40 100
Table No: 10
Graph showing the Services provide are Tailor made or not

Graph No: 10
Analysis: From the above table we can analyze that 60% of the Depository
holders are not satisfied with the services. Out of 100 only 40% of investors
are accepted as Tailor made services.
Inference: From the above analysis we can infer that majority of investors
will expect better service.
11. Table showing through which SHCIL provides the Value-added

services to clients

Online transaction 16 40
updates
Faxes / E-mails 8 20
Portfolio updates 4 10
Daily updates 12 30
(Website)
Total 40 100
Table No: 11
Graph showing the Value-added services provided by SHCIL

45 40
40
35
30
25 Graph No: 11 20
Analysis:
20From the above table we can analyze that the 40% of the
respondents says that the value-added services provided by SHCIL is through
15
online transaction, 30% by website, 20% E-mails, 10% portfolio updates.
10
Inference: Majority of the respondents accept that the value-added services
5
are through online transaction updates.
0
12. Table showing how satisfying is SHCIL in terms of Infrastructure
& the hardware, software installed for serving clients

Excellent 12 30
Very Good Online trans.
20 50 Faxes
Good 6 15
Average 2 Updates 5 mai
Total 40 100
Table No: 12
Graph showing how satisfying SHCIL is in terms of Infrastructure,

software etc 50
50
40 Alliance Business Academy 99

Graph No: 12
Analysis: The above survey reveals that the Depository holders are satisfied
in terms of infrastructure and software with the result of 30% as excellent,
50% as Very good followed by 15% as Good and 5% as Average.
Inference: Majority of the DP holders are satisfied.
13. Table showing how efficient & effective the DP services of SHCIL
compared to other financial institutions

Excellent 20 50
Very Good 16 40
Good 4 10
Average 0 0
Total 40 100
Table No: 13
Graph showing how efficient & effective the DP services of SHCIL

compared to other financial institutions
60
50
50
40
Graph No: 13
Analysis: From the above table it is analyzed that 50% of respondents are
agreed as excellent & more effective DP services in SHCIL when compare to
other institution.
40% of respondents agreed as Very good, 10% as Good & 0% as average.
Inference: DP services of SHCIL is excellent when compare to other

financial institutions.
14. Table showing how satisfactory are the interest rates in terms of
loan against demat held in DP.
Yes 16 40
No 24 60
Total 40 100
Table No: 14
Graph showing the interest rates in terms of loan against demat.

Graph No: 14
Analysis: From the above table it is analyzed that 60% of respondents are
not satisfied with interest rates in terms of loan against demat.
Inference: Through the graph we can say that the interest rates are high.
15. Table showing how safe & secure the demat is

Yes 36 90
No 4 10
Total 40 100
Table No: 15
Graph showing how safe the demat is
10
Graph No: 15
Analysis: From the table it is analyzed that 90% of Depository holders are
feeling that demat is safe & secure, whereas only 10% are feeling unsatisfied.
Inference: Majority of respondents are safe with demat.
16. Table showing service charges charged by SHCIL.
High 24 60
Reasonable 16 40
Low 0 0
Total 40 100
Table No: 16
Graph showing service charges charged by SHCIL.
70
60
60
Graph No: 16
Analysis: From the above survey it has inferred that 60% of respondents are
feeling that the service charges charged by SHCIL is high, and 40% as
reasonable, 0% as low.
Inference: Majority that is 60% of respondents are not satisfied with service
charges.
17. Table showing how effective the SHCIL in settling the stock.
Fast 20 50
Slow 20 50
Total 40 100
Table No: 17
Graph showing how effective the SHCIL in settling the stock.
60
50
50 Alliance Business Academy 104
Graph No: 17
Analysis: From the above table it can be interred that 50% of the
respondents are telling fast in settling the stock & other 50% are telling slow in
settling.
Inference: The respondents are equally responding for the effectiveness in

settling the stock.
18. Table showing how satisfactory is the on-line trading

Excellent 20 50
Very Good 8 20
Good 12 30
Average 0 0
Total 40 100
Table No: 18
Graph showing how satisfactory is the on-line trading
60
50
50
Graph No: 18
Analysis: The responses to the On-line trading ranges between ‘Good’ and
‘Excellent’, 100% of the respondents record their responses between ‘Good
and Excellent.
Inference: It is inferred that the number of respondents are very much

satisfied with the on-line trading in SHCIL.

Summary of Findings

FINDINGS
Based on the data analysis and interpretation, the following findings noted:
• 20% of the respondents, who are not stock holders are under the age
group of 20-30 and 50 and above.
• Out of the entire DP holders 10% of them trading in 15-20 years, 20%
are 10-15 years, 30% are 5-10 years, 40% are 0-5years. This
indicates the popularity of the organization in the last 10 years, during
which time 70% of the existing members are trading from
• 0-5 years, whereas the previous 10 years the total percentage is only
30%. This indicates a healthy trend form last 10 years.
• From the analysis part it shows the most preferred DP product is

Mutual Funds. It shows that the Interest of the investors would be
funds which has less risk and high returns. This is substantiated the
fact that 40% of the holders are interested to invest in Mutual Funds
and other investments are distributed as Bonds, Broking and
Insurance.
• From the survey it is noted that the best method of spreading

information seems to be Internet, which draws the interest of investors
better than any other media.
• The survey indicates the trading is equally shared between BSE and
NSE.
• The respondents gave equal interest to Safety and Security, Returns

provided and quality of service, only 10% as Market updates.

Therefore it is essential for the company to give more priority about Safety
and Security and returns.
• Though the Equity shares has got the highest risk, the investors are
willing to take risk by investing in Equity shares for higher returns since
the SHCIL is doing well.
• It is also noted that 60% of the investors expect Tailor-made services.
• It is noted from the survey the Value-added services provided by

SHCIL is through Online updates.
• The survey indicates majority of respondents are satisfied in terms of

Infrastructure, hardware and software installed for serving clients.
• The services provided by the SHCIL is better when compared to other

financial institutions.
• The investors feel that the Interest rates provided or charged by SHCIL
is high against demat held in DP.
• The survey indicates that the investors are more safe and secured from
the demat in SHCIL

Recommendations &
Conclusion

RECOMMENDATIONS
• Since the interest and web based communication is getting popular

SHCIL should update their website atleast on a weekly basis so that
the major percentage of the remaining i.e. 20% can be brought in.
• Since Dematerialization plays a major role in influencing DP holders

there must be increased effort in promoting enhanced services
involving security and safety.
• To encourage the existing and prospective shareholders good returns

must be ensured in addition to security and safety.
• Since the Investors taken interest in Equity shares SHCIL should

provide frequent updates on the web relating to Equity share trading
movement.
• Since the Investors expect better service form SHCIL, it should provide
value-added services.
• It is necessary for the organization to sustain their primary position as

compare to other Financial Institutions as innovative and useful
services.
• It is necessary to reduce the service charges charged by SHCIL
• It is also necessary to reduce the Interest rates on loans against

demat.
• The online trading efforts must be made more scientific and effective.

Conclusion
On the whole, my project at SHCIL was worthwhile as I got the opportunity to

learn a lot about the capital market. It was a wonderful experience interacting
with employees of the organization and simultaneously enhancing my
knowledge and skills about stock market operations. I got to know about the
process of dematerialization, account opening and how the trades department
settles the various transactions etc.
Working at SHCIL and preparing this project report was a learning experience
and I shall make immense use of it in my career.

ANNEXURE.1
BIBLIOGRAPHY
BOOKS:
AUTHOR TITLE OF THE PUBLISHER’S PLACE

OF
BOOK NAME
PUBLICATION
GURUSWAMY “Financial Service and Himalaya Delhi

Markets”
GORDEN “Financial Markets and Himalaya

Delhi
AND Services”
NATRAJ
AVADHANI “Investment and Securities Himalaya Delhi

Markets in India”
PRASSANNA “Financial Management” Tata McGraw Delhi

CHANDRA Hill
L.M.BHOLE “Financial Institutions Tata McGraw Delhi

and Markets” Hill
MAGAZINES:
• Dalal Street
• Business today

• Money
• Business India.
NEWS PAPERS:
• The Economic Times

• Business standard
• Outlook money
INTERNET / WEBSITE
WWW.google.com
WWW.online.stockholding.com
WWW.Sharekhan.com

ANNEXURE.2
STUDY ON COMPARATIVE ANLYSIS OF THE DEPOSITORY

PARTICIPANTS
QUESTIONNAIRE
1. Name of the Respondent …………………………………….
2. Address and Phone No. ………………………………...........
3. Sex
Male Female
4. Occupation
5. Age Group (in years)

20-30 30-40
40.50 50-60
6. Are you a Share holder?
Yes No
7. Since how long are you holding and trading the securities in SHCIL?
0-5yrs 5-10yrs
10-15yrs 15-20yrs

8. How secure do you feel by opting your securities in demat form?
Excellent Very Good
Good Average
9. Which DP Product do you prefer?
• Broking/Internet trading
• MF Mobilization
• Government Bonds
• Insurance
10. Through which source do you avail information regarding SHCIL?
• Newspaper
• Magazines
• Word of mouth
• Internet
11. What is the most preferred area of avenues of investment?
• Mutual Funds
• Government Bonds
• Equity Shares
• Others Specify
12. Does SHCIL provide Tailor- made services?
Yes No

13. What are the attribute of services expected by the investor?
• Quality of Service
• Market Updates
• Returns Provided
• Safety and Security
14. The SHCIL provide Value-added services to client by
• Online transaction updates

• Faxes / E-mails
• Portfolio updates
• Daily updates
15. How satisfying is SHCIL in terms of Infrastructure and the hardware and
software installed for serving its clients?
Excellent Very Good
Good Average
16. How efficient and effective is the DP services of SHCIL when compared
to other financial institution?
Excellent Very Good
Good Average

17. The loan against demat shares held in the DP a/c with SHCIL is
satisfactory in terms of interest rates
Yes No
18. Do you think demat is safe and secure?
Yes No
19. The service charges charged by SHCIL?
High Reasonable Low
20. How often the stocks are settled?
Fast Slow
21. How satisfying is the On-line trading for you?
Excellent Very Good
Good Average

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A PROJECT REPORT

“Depository Participants in Bangalore”

For the Partial Fulfillment of

I, Chandrima Nandi, studying in Alliance Business Academy, Bangalore do

Date: Name of student: Chandrima Nandi

I consider it privilege to express through my report a few words of gratitude to all

CONTENTS OF THE TABLES

Serial Title Page

CONTENTS OF THE GRAPHS

Serial Title Page

Alliance Business Academy 1

Alliance Business Academy 2

Alliance Business Academy 3

Alliance Business Academy 4

Services provided by Depository

No. of Depository in the country

Alliance Business Academy 5

Introduction of the depositories has paved the way for instituting an

Alliance Business Academy 6

Limitations of the study

Alliance Business Academy 7

Alliance Business Academy 8

Globalization of the financial market has led to a manifold increase in the

Alliance Business Academy 9

changes with number of financial services and banking companies, private

The capital market consists of primary market and secondary market

Alliance Business Academy 10

Depository is an organization where the securities of a share holder are kept

In India, the Depository Act defines a depository to mean “A company formed

Legal Framework of Depositories:

The depositories act of 1996 provides for regulation of depositories in

SEBI formulated the Depositories and participants regulations act, 1996 to

Eligibility Criteria For a Depository:

Alliance Business Academy 11

Any of the following may be a depository:

1. A public financial institution as defined in section 4a of the Companies Act

2. A bank included in the second schedule to the RBI Act, 1934.

3. A foreign bank operating in India with the approval of the RBI.

4. Recognized stock exchanges.

5. An institution engaged in providing financial services where not less than

6. A custodian of securities approved by government of India.

7. A foreign financial services institutions approved by government of India.

The promoters of depository are also known as its sponsor. A depository

Agreement Between Depository and Issuers:

Rights and Obligations of Depositories:

1. Every depository should have adequate mechanisms for reviewing

2. Annual inspections of the procedures and same should be reported to

3. To ensure that the integrity of automatic data processor systems is

4. Adequate measures including insurances, to protect the interests of the

Alliance Business Academy 12

One of the primary functions of depository is to eliminate or minimize the

Transfer and registration

A transfer is a legal change of ownership of a security in the records of the

Pledge and hypothecation

Depositories allow the securities placed with them to be used as collateral to

Linkages with clearing system

Alliance Business Academy 13

Depository participants (DPS) are described as an agent of the depository.

Eligibility Criteria For Depository Participant

 A public financial institution as defined in sections of the companies

 A foreign bank operating in India with the approval of RBI.

 A state financial corporation established under the provisions of section

 An institution engaged in providing financial services promoted jointly

 A custodian of securities who has been granted a certificate of