AWARENESS OF CUSTOMERS REGARDING TO DEMAT ACCOUNT IJTBM

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International Journal of Transformations in Business Management http www ijtbm com. IJTBM 2012 Vol No 1 Issue No 6 Apr Jun ISSN 2231 6868. branch of the same DP or to another DP of the same depository or another depository provided. the BO Account s at transferee DP and at transferor DP are one and the same i e identical in all. In case the BO Account at transferor DP is a joint account the BO Account at transferee DP. should also be a joint account in the same sequence of ownership. BENEFITS OF DEMAT,The benefits are enumerated below. A safe and convenient way to hold securities,Immediate transfer of securities. No stamp duty on transfer of securities, Elimination of risks associated with physical certificates such as bad delivery fake securities. delays thefts etc, Reduction in paperwork involved in transfer of securities. Reduction in transaction cost,No odd lot problem even one share can be sold.
Nomination facility, Change in address recorded with DP gets registered with all companies in which investor holds. securities electronically eliminating the need to correspond with each of them separately. Transmission of securities is done by DP eliminating correspondence with companies. Automatic credit into Demat account of shares arising out of bonus split consolidation. merger etc, Holding investments in equity and debt instruments in a single account. FEES INVOLVED, Now to the crux the cost of opening and holding a Demat account There are four major. charges usually levied on a Demat account Account opening fee annual maintenance fee. custodian fee and transaction fee All the charges vary from DP to DP. Depending on the DP there may or may not be an opening account fee Private banks such as. ICICI Bank HDFC Bank and UTI Bank do not have one However players such as Karvy. Consultants and the State Bank of India do so But most players levy this when you re open a. Demat account though the Stock Holding Corporation offers a lifetime account opening fee. which allows you to hold on to your Demat account over a long period This fee is refundable. Custodian fee is charged monthly and depends on the number of securities international. securities identification numbers ISIN held in the account It generally ranges between Rs 0 5. to Rs 1 per ISIN per month DPs will not charge custody fee for ISIN on which the companies. have paid one time custody charges to the depository. The transaction fee is charged for crediting debiting securities to and from the account on a. International Journal of Transformations in Business Management. International Journal of Transformations in Business Management http www ijtbm com. IJTBM 2012 Vol No 1 Issue No 6 Apr Jun ISSN 2231 6868. monthly basis While some DPs such as SBI charge a flat fee per transaction HDFC Bank and. ICICI Bank peg the fee to the transaction value subject to a minimum amount The fee also. differs based on the kind of transaction buying or selling Some DPs charge only for debiting. the securities while others charge for both The DPs also charge if your instruction to buy sell. fails or is rejected In addition service tax is also charged by the DPs. In addition to the other fees the DP also charges a fee for converting the shares from the. physical to the electronic form or vice versa This fee varies for both Demat and remats requests. For Demat some DPs charge a flat fee per request in addition to the variable fee per certificate. while others charge only the variable fee, For instance Stock Holding Corporation charges Rs 25 as the request fee and Rs 3 per certificate. as the variable fee However SBI charges only the variable fee which is Rs 3 per certificate. Remat requests also have charges akin to that of Demat However variable charges for Remat. are generally higher than Demat Some of the additional features usually offered by banks are. Some DPs offer a frequent trader account where they charge frequent traders at lower rates. than the standard charges, Demat account holders are generally required to pay the DP an advance fee for each account.
which will be adjusted against the various service charges The account holder needs to raise the. balance when it falls below a certain amount prescribed by the DP However if you also hold a. savings account with the DP you can provide a debit authorisation to the DP for paying this. Finally once you choose your DP it will be prudent to keep all your accounts with that DP so. that tracking your capital gains liability is easier This is because for calculating capital gains. tax the period of holding will be determined by the DP and different DPs follow different. methods For instance ICICI Bank uses the first in first out FIFO method to compute the. period of holding The proof of the cost of acquisition will be the contract note The computation. of capital gains is done account wise,DEMAT CONVERSION. Converting physical holding into electronic holding Dematerialising securities. In order to Dematerialise physical securities one has to fill in a DRF Demat Request Form. which is available with the DP and submit the same along with physical certificates one wishes. to Dematerialise Separate DRF has to be filled for each ISIN Number. The complete process of Dematerialisation is outlined below. Surrender certificates for Dematerialisation to your depository participant. Depository participant intimates Depository of the request through the system. Depository participant submits the certificates to the registrar of the Issuer Company. International Journal of Transformations in Business Management. International Journal of Transformations in Business Management http www ijtbm com. IJTBM 2012 Vol No 1 Issue No 6 Apr Jun ISSN 2231 6868. Registrar confirms the Dematerialisation request from depository. After Dematerialising the certificates Registrar updates accounts and informs depository. of the completion of Dematerialisation, Depository updates its accounts and informs the depository participant. Depository participant updates the Demat account of the investor. OBJECTIVES OF THE STUDY, The present study is under taken to study the investment of different personal and awareness. among the customers about the Demat Account We take below mentioned objectives in the. present study,1 To know the benefits of the Demat Account. 2 To know the Perception of the Demat Account of the Customers. The present research study is based on the primary data as well as secondary data. SAMPLE SIZE, To fulfill our study objectives we adopted in this study the Stratified Random sampling method.
Out of the total population we have selected 400 beneficiaries who have or have not Demat. Account After the selection of sample we classified it into two categories male and female on. the basis of gender Thus a total of 240 male and 160 female were selected After this we further. categorized it on the basis of profession as like salaried business and others retired unemployed. and housewife categories In case of male 240 we find that 136 come from salaried group 80. from business group 16 from retired and 8 from unemployed categories. In case of female 160 we find that 120 come from salaried group 20 from business group 6. from retired and 4 from unemployed and 10 from housewife categories. Demat Account in very simple way A Demat account allows you to buy sell and transact shares. without endless paperwork and delays It is also safe secure and convenient It also helps you to. avoid bad delivers caused by signature mismatch postal delay and loss of certificates in transit. Around 200 depository participants DPs offer the Demat account facility A comparison of. the fees charged by different DPs is detailed below But there are three distinct advantages of. having a Demat account with a bank quick processing accessibility and online transaction. Generally banks credit your Demat account with shares in case of purchase or credit your. savings accounts with the proceeds of a sale on the third day Banks are also advantageous. because of the number of branches they have Some banks give the option of opening a Demat. account in any branch while others restrict themselves to a select set of branches Some private. banks also provide online access to the Demat account So you can check on your holdings. transactions and status of requests through the net banking facility A broker who acts as a DP. International Journal of Transformations in Business Management. International Journal of Transformations in Business Management http www ijtbm com. IJTBM 2012 Vol No 1 Issue No 6 Apr Jun ISSN 2231 6868. may not be able to provide these services, Table 1 Comparison of Various Charges of Major Depositary Participant. Depositary Account Opening Services Charges Custody Fee Rs. Participant Charges Rs Rs annum ISIN month,HDFC Bank Nil 299 1 00. ICICI Bank Nil 300 0 50,SBI 313 203 0 75,Stock Holding Corp 420 350 1 00. UTI Bank Nil 200 0 75,Source Business Line Internet Edition. If the account is opened with CDSL this fee is obviated. Charges are inclusive of services tax, From Table 1 it is clearly observed that various charges like Account opening services charges.
Rs Annum and custody fee Rs month varies from among different Depositary Participant. DPs The charges for account opening annual account maintenance fees and transaction. charges vary between DPs Various private banks HDFC ICICI and UTI not charging any. Account opening fee and also provide the online access to the Demat Account Maximum. Account opening charge of Rs 420 charges are inclusive of services tax and Services charge. of Rs 350 respectively charged by Stock Holding Corporation Service charges of various. Depositary Participant ranges between Rs 200 to Rs 350 per annum UTI Bank charged. minimum of 200 Rs Annum Custodian fee is charged monthly and depends on the number of. securities International securities identification numbers ISIN held in the account and ranges. between Rs 0 5 to Rs 1 per ISIN per month Stock Holding Corporation not charged any. custody fee if the account is opened with CDSL, Table 2 Transaction Charges of Major Depositary Participants. Transaction charges,Buying Selling,HDFC Bank 0 04 min Rs25 0 04 min Rs25. ICICI Bank 0 02 min Rs 20 0 04 min Rs25,SBI Rs 11 Rs 21. Stock Holding Corp 0 65 min Rs 65 0 75 min Rs 50,UTI Bank Rs 10 Rs 25. Source Business Line Internet Edition, The rates are applicable only if you also transact the respective DPs if you transact with.
different DPs the rates vary, International Journal of Transformations in Business Management. International Journal of Transformations in Business Management http www ijtbm com. IJTBM 2012 Vol No 1 Issue No 6 Apr Jun ISSN 2231 6868. In the Table 3 2 transaction fee of major Depositary Participant differ based on the kind of. transaction buying selling SBI Bank charges a flat fee per transaction Rs 11 for buying and. Rs 21 for selling HDFC Bank and ICICI Bank peg the fee to transaction value subject to a. minimum amount HDFC Bank charged same transaction fee of 0 04 min of Rs 25 for. crediting and debiting securities Depositary Participant DPs also charges a fee for converting. the shares from physical to electronic from to vice versa Stock Holding Corporation charges. Rs 25 as the request fee and Rs 3 per certificate as variable fee SBI charges only variable fee of. Rs 3 per certificate Variable charges of Remat are generally higher that Demat Account. Table 3 View Poll Results Conducted by Traderji com Which Online Broker you prefer. Broker preferred Frequency Percentage,5paise 84 14 21. Sharekhan 114 19 29,Motilaloswal 21 3 55,Icicidirect 138 23 35. HDFC 19 3 21,Indiabulls 91 15 4,Kotak 43 7 28,Any other 81 13 71. Source Traderji com, Around 200 Depositary Participant offers Demat Account facility as such 5paise Sharekhan.
Motilaloswal ICICIdirect HDFC Indiabulls Kotak etc View poll conducted by Traderji com. which online broker preferred by investors Table 3 3 and Graph 3 1 It is observed that. ICICIdirect preferred maximum by 23 4 of the customers 19 3 customer preferred to online. trading with Sharekhan Indiabulls preferred by 15 4 of the customers 13 71 customers. polled for any other online broker Banks are advantageous as bank credit Demat account with. shares in case of purchase or credit saving account with the proceeds of a sale on the third day. and banks having number of branches Maximum number of Customers preferred ICICI Bank. this result is in accordance as ICICI bank not charging any fee for Account Opening and charge. nominal fee of Rs 300 annum as services charge, International Journal of Transformations in Business Management. International Journal of Transformations in Business Management http www ijtbm com. IJTBM 2012 Vol No 1 Issue No 6 Apr Jun ISSN 2231 6868. Graph 1 Online Brokers Preferred by Customers Opinion Poll. 13 71 14 21 Sharekhan,7 28 Motilaloswal,19 29 Icicidirect. 3 55 Indiabulls,23 35 Kotak,Source Traderji com, The changing scenario has forged a change in the Indian securities market Also certain market. imperfections operative in the market called for the change The Securities and Exchange Board. of India SEBI mandates a Demat account for share trading above 500 shares Demat account. is a type of banking account which Dematerializes paper based physical stock shares The. Demat account though the Stock Holding Corporation offers a lifetime account opening fee which allows you to hold on to your Demat account over a long period

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