Report Sagar

A project report on

&

Submitted in the partial fulfillment Of the Requirement For The Award Of Degree Of MASTER OF BUSINESS ADMINISTRATION

Submitted by:GEETA VERMA Submitted to: Mrs. PREETI SRIVASTAVA (FACULTY GUIDE) SAGAR INSTITUTE OF TECHNOLOGY & MANAGEMENT BARABANKI

1

PREFACE The First hand experience that I have gained from the Banking Sector has given me immense confidence, to work with full cooperation with any Department. I am also grateful and convey my sincere thanks to the support staff there, for the kind support extended during the completion of my Research. I would also like to acknowledge the support and help from some of the Financial Consultants, from whom I’ve tried to learn the practical aspects of this industry.

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ACKNOWLEDGEMENT

I would like to express my sincere gratitude and thanks to the PROF. K.K.MISHRA (H.O.D.) Department of Business Administration) for his invaluable Guidance, immense patience and for his constant encouragement during the Research. The First hand experience that I have gained from the Banking Sector has given me immense confidence, to work with full cooperation with any Department. I am also grateful and convey my sincere thanks to the support staff there, for the kind support extended during the completion of my Research. I would also like to acknowledge the support and help from some of the Financial Consultants, from whom I’ve tried to learn the practical aspects of this industry. I would also like to thank my sincere gratitude and thanks to Mrs.

Preeti Srivastava (faculty of Department of Business

Administration)

(GEETA VERMA) MBA IInd year

3

CONTENT

PAGE No.

Acknowledgement

3

Chapter- 1 Company profile

4

Chapter-2 Introduction about Demat

8

Chapter-3 Objective of the project

28

Chapter-4 Methodology

30

 Section A- Details of ICICI Demat Services  Section B- Details of IDBI Demat Services  Section C- Which is better? ICICI or IDBI

36 44 57

Chapter-5 Analysis in the Project

61

Chapter-6 Finding in the Project

63

Chapter-7 Conclusion of the Research

78

 Appendixes  Questionnaires  Bibliography

86 87 90

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EXECUTIVE SUMMARY TOPIC; Comparative Analysis Of ICICI& IDBI BANK (Demat Account)

RESEARCH OBJECTIVE: The objective of this research is as follows:  To know the functioning of stock exchange (Stock market).  To know, how the stockbrokers earn profit by providing services to the investors.  To study that which type of opportunity looking by stock brokers in coming years.  To find out new avenues of opportunity of stock broking companies

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RESEARCH METHODOLOGY Research design Descriptive research design includes survey & fact findings inquiries of different kinds. The major purpose of descriptive research is description of state of affairs as it exits at present.

Sample design

: Simple random sampling

Simple random sampling also known as probability sampling Under this sampling design every item of universe has an equal chance of inclusion in sample. It is say to a lottery method.

Collection of Data Primary data – Questionnaire Secondary Data –Newpaper, website ,magazine

Sample size

: - The sample size of research study is 60

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CHAPTER – 1 COMPANY PROFILE

7

ICICI BANK The Industrial Credit & investment corporation of India limited was introduced on 5th January 1995 as a public limited company under the Indian companies & subsequently renamed ICICI limited with effect from 11th sept. 1955.

In 1994, the bank set up an in-house training institute at pune which was inaugurated on 13th Oct. to case of the long time training needs of the employees of all the company’s in ICICI group at various level.

It has been admitted as the 18th Depository Participant during the week ended 22nd Feb. 1997.

In 1999, ICICI, the 2nd largest financial institution, has proposed a yearly commission not exceeding 1% of net profit to its non-whole time directors. ICICI bank, the first commercial bank from India to get its stock listed on NYSE in the year 2000.

8

IDBI BANK Set up under an Act of Parliament as a wholly owned subsidiary of Reserve Bank of India. February 1976: Ownership transferred to Government of India. Designated Principal Financial Institution for coordinating the working of institutions at national and State levels engaged in financing, promoting and developing industry. March 1982: International Finance Division of IDBI transferred to ExportImport Bank of India, established as a wholly-owned corporation of Government of India, under an Act of Parliament. December 1993: Set up IDBI Capital Market Services Ltd. as a wholly-owned subsidiary to offer a broad range of financial services, including Bond Trading, Equity Broking, Client Asset Management and Depository Services. IDBI Capital is currently a leading Primary Dealer in the country. August 2000: Became the first All-India Financial Institution to obtain ISO 9002:1994 Certification for its treasury operations. Also became the first organisation in Indian financial sector to obtain ISO 9001:2000 Certification for its forex services. September 2004:The new entity "Industrial Development Bank of India" was incorporated on September 27, 2004 and Certificate of commencement of business was issued by the Registrar of Companies on September

9

28, 2004.January 2005:The Board of Directors of IDBI Ltd., at its meeting held on January 20, 2005, approved the Scheme of Amalgamation, envisaging merging of IDBI Bank Ltd. with IDBI Ltd. Pursuant to the scheme approved by the Boards of both the banks, IDBI Ltd. will issue 100 equity shares for 142 equity shares held by shareholders in IDBI Bank Ltd. EGM has been convened on February 23, 2005 for seeking shareholder approval for the scheme.

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CHAPTER – 2 INTRODUCTION ABOUT DEMAT  Introduction  Savings  Bank Accounts  Trading  Settlement  Charges

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2.1: INTRODUCTION 2.1(a): Dematerialized Trading Indian investor community has undergone see changes in the past few years. India now has a very large investor population and ever increasing volumes of trades. However, this continuous growth in activities has also increased problems associated with stock trading. Most of these problems arise due to the intrinsic nature of paper based trading and settlement, like theft or loss of share certificates. This system requires handling of huge volumes of paper leading to increased costs and inefficiencies. Risk exposure of the investor due to this trading in paper. Some of these risks are: 1.Delay in transfer of shares. 2.Possibility of forgery on various documents leading to bad deliveries, legal disputes etc. 3.Possibility of theft of share certificates in the market. 4.Multiplication or loss of share certificates in transit. 5.Prevalence of fake certificates in the market. The physical form of holding and trading in securities also acts as a bottleneck for broking community in capital market operations. The introduction of NSE and BOLT has increased the reach of capital

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market manifolds. The increase in number of investors participating in the capital market has increased the possibility of being hit by a bad delivery. The cost and time spent by the brokers for rectification of these bad deliveries tends to be higher with the geographical spread of the clients. The increase in trade volumes lead to exponential rise in the back office operations thus limiting the growth potential of the broking members. The inconvenience faced by investors (in areas that are far flung and away from the main metros) in settlement of trade also limits the opportunity for such investors, especially in participating in auction trading. This has made the investors as well as broker wary of Indian capital market. In this scenario, dematerialized trading is certainly a welcome move. 2.1(b): What is Dematerialization? Dematerialization or “Demat” is a process whereby your securities like shares, debentures etc, are converted into electronic data and stored in computers by a Depository. Securities registered in your name are surrendered to depository participant (DP) and these are sent to the respective companies who will cancel them after “Dematerialization” and credit your depository account with the DP. The securities on Dematerialization appear as balances in your depository account. These balances are transferable like physical shares. If at a later date, you wish to have these “Demat” securities converted back into paper certificates; the Depository helps you to do this.

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Dematerialization is the process of converting the securities held in physical form (certificates) to an equivalent number of securities in electronic form and crediting the same to the investor’s Demat account. Dematerialized securities do not have any certificate numbers or distinctive numbers and are dealt only in quantity i.e.; the securities are fungible. Dematerialization of your holdings is not mandatory. You can hold your secure Demat form or in physical form. You can also keep part of your holdings (in the same script) in Demat form & part in physical form. However, securities specified by SEBI can be delivered only in Demat form in the stock exchanges connected to NSDL and / or CDSL. 2.1(c): What is Depository? Depository functions like a securities bank, where the dematerialized physical securities are traded and held in custody. This facilitates faster, risk free and low cost settlement. Depository is much like a bank and performs many activities that are similar to a bank. Following table compares the two. Bank Depository Holds funds in accounts Holds securities in account Transfers funds between Transfers securities between accounts Transfers money

without

accounts handling Transfers

without

handling

securities

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Safekeeping of money

Safekeeping of securities

2.1(d): NSDL and CDSL At present there are two depositories in India, National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). NSDL is the first Indian depository; it was inaugurated in November 1996. NSDL was set up with an initial capital of US$28mn, promoted by Industrial Development Bank of India (IDBI), Unit Trust of India (UTI) and National Stock Exchange of India Ltd. (NSEIL). Later, State Bank of India (SBI) also became a shareholder. The other depository is Central Depository Services (CDS). It is still in the process of linking with the stock exchanges. It has registered around 20 DPs and has signed up with 40 companies. It had received a certificate of commencement of business from SEBI on February 8, 1999. These depositories have appointed different Depository Participants (DP) for them. An investor can open an account with any of the depositories DP. But transfers arising out of trades on the stock exchanges can take place only amongst account-holders with NSDL’s DPs. This is because only NSDL is linked to the stock exchanges (nine of them including the main ones-National Stock Exchange and Bombay Stock Exchange). In order to facilitate transfers between investors having accounts in

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the two existing depositories in the country the Securities and Exchange Board of India has asked all stock exchanges to link up with the depositories. SEBI has also directed the companies’ registrar and transfer agents to effect change of registered ownership in its books within two hours of receiving a transfer request from the depositories. Once connected to both the depositories the stock exchanges have also to ensure that inter-depository transfers take place smoothly. It also involves the two depositories connecting with each other. The NSDL and CDSL have signed an agreement for interdepository connectivity. 2.1(e): What is a DP? A depository is like a bank where securities are held in electronic (dematerialized) form. In India, there are two Depositories – National securities Depositories Limited (NSDL) and Central Depository Services Limited (CSDL). Under the Depositories Act, investors can avail of the services of the Depositories through Depository Participants (DP) such as ICICI bank. DP’s are like bank branches wherein shares in physical form need to be deposited for converting the same to electronic (Demat) form. NSDL carries out its activities through various functionaries called business partners who include Depository Participants (DPs), issuing corporate and their Registrars and Transfer Agents, Clearing corporations/Clearing Houses etc. NSDL is electronically linked to

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each of these business partners via a satellite link through Very Small Aperture Terminals (VSATs). The entire integrated system (including the VSAT linkups and the software at NSDL and each business partner’s end) has been named as the “NEST” [National Electronic Settlement & Transfer] system. The investor interacts with the depository through a depository participant of NSDL. A DP can be a bank, financial institution, a custodian or a broker. Just as one opens a bank account in order to avail of the services of a bank, an investor opens a depository account with a depository participant in order to avail of depository facilities.

2.2: SAVINGS Trading in dematerialized shares results in substantial savings for the investors. Following tables gives an idea about these savings. Savings for a person who buy shares for long term investment (On a purchase of Rs10000) Item Brokerage *Stamp Duty Postal Charges Company Objection

Physical

Depository (demat)

Savings

(Rs) 75-100 50 10-30 10-30

(RS) 50-75 -

(Rs) 25-50 50 10-30 10-30

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(courier etc.) Settlement charges #Custody (5 years) Total

-

5-10 10-50

-(5-10) -(10-50) 35-100

* Stamp duty of 0.5% # Custody charge of 0.05%- 0.1%

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Savings for an investor who sells dematerialized shares (For a sale of Rs10000) Physical

Item *Brokerage Company Objection (courier, etc.) Settlement charges Total ·

Many

brokers

offer

Depository (demat) Savings

(Rs) 75-100 10-30

(Rs) 50-75 -

(Rs) 25-50 10-30

-

-(5-10)

-(5-10) 25-75

reduced

brokerage

for

selling

of

dematerialized securities since they will not have the fear of bad delivery

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Savings for a trader who buys and sells very often. (For a trader who turns over his portfolio of Rs10000 ten times in a year.)

Item

Physical (Rs)

Depository (demat)

Savings (Rs)

(Rs) *Brokerage Settlement charges Custody (5 years) Total

750-1000 -

500-750 50-100

250-500 -(50-100)

-

2-10

-(2-10) 140-390

* Many brokers offer reduced brokerage for sell of dematerialized securities since they would not have fear of bad delivery.

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2.3: BANK ACCOUNTS

2.3(a): How to open a bank account with a DP

Opening a depository account is as simple as opening a bank account. You can open a depository account with any DP convenient to you. To open an account you have to: ·

Fill up the account opening form, which is available with the DP.

·

Sign the DP-client agreement, which defines the rights and duties of the DP and the person wishing to open the account.

·

Receive your client account number (client ID).

·

This client ID along with your DP ID gives you a unique identification in the depository system.

There is no restriction on the number of depository accounts a person can open. However, if your existing physical shares are in joint names, you have to open the account in the same order of names before you submit your share certificates for demat. A sole holder of the share certificates cannot add more names as joint holders at the time of dematerializing his share certificates. However, if the investor wants to transfer the ownership from his individual name to a joint name, he should first open an account as the sole holder (account A) and dematerialize the share certificates. He should then open another depository account (account B) in which

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he is the first holder and the other person is the second holder and make an off market transfer of the shares from the account A to account B. The investor will incur a charge on this transaction. Alternatively, the certificates can be transferred to the joint ownership and then sent for Dematerialization. Right now, as per the Companies Act, there is no nomination facility for shares (whether in the physical or in the electronic form). The nomination facility for shares can be availed of only when the relevant provisions in the Companies Act are amended. NSDL captures the details of the nominee when the account is opened so as to offer the facility as soon as the relevant amendments are effected in the Law. A client can choose to open more than one account with same DP. In addition to this, he has a choice of opening accounts with more than one DP. However a broker can open just one Clearing Member account per card/ stock exchange for clearing purpose, but he can still open multiple beneficiary accounts Beneficiary is the personal account wherein brokers can keep their personal holdings. A broker has only one Clearing Member-pool-account. One Clearing Member pool account is opened per card/ stock exchange to settle trades in the dematerialized form. The Clearing Corporation/ House just deals with one designated account for pay-in and payout and the broker's clients know to which account they have to deliver and receive securities from. A clearing member cannot hold his personal holdings in his clearing member account. A broker may deal in the depository system as a clearing member only through a special account, known as the

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Clearing Member account. This account can be used only for clearing purposes and not for holding his own securities in it. As this is a transitory account, the securities held in this account are not eligible for corporate actions. Therefore, the broker will have to open a separate beneficiary owner account to hold his investments. There is no compulsion for the client to open his account with the same DP as that of his broker. Even if he has an account with another DP, he can carry out normal business with his broker. There is no loss in operational efficiency. But it is possible that opening account with his broker's DP may work out to his advantage, as some DPs may offer special charge structure if the broker and his clients are dealing through him.

2.3(b): How to choose a DP

Following are the few aspects that you should consider before choosing a DP: 1. Branch-level service. Most DPs offer depository services from their main branch as well as through other branches and franchisees. Higher the number of branches your DP has, (which offer depository services) greater will be the geographical convenience you will have. Recently Department of Telecommunications has allowed the DPs (only bank-DPs at present) to connect their entire internal network to NSDL. The NSDL is making changes in its software for DPs to meet

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the Dot conditions. After it is done DPs will be able to execute your instructions directly at the branch level thus saving time and improving efficiency. So check before opening an account whether your DP (if it is a bank-DP) intends to interconnect its branch network with that of NSDL. Before opening an account with a DP you should also check whether the DP is offering all the services through its branches. DPs mandate a time limit for submission of debit instructions before settlement pay-in time. It should be checked whether the time limit applies equally to all the branches (or franchisees) of the DP or whether it varies.

2. Backup facilities Having an adequate backup system is extremely necessary for a DP. In case of a system failure all the data could be lost if backup facilities are not present. Although depositories too have the data with them but a strong system with your DP ensures no risks and hassles. So before opening an account get details from your DP about its computer system's technical specifications and backup facilities. 3. Safe procedures. Your securities account can get debited only if you submit to your DP a duly filled and signed 'delivery instruction' (debit instruction) form (separate for market trades and off-market transfers) that authorizes the DP to debit your account. You will execute this form only when you have sold shares. But you could have worries that some one else can forge your signature on such a form, which your DP will not be 24

able to detect, and your account will get debited .To get rid of these worries you should check that delivery instruction form book that you get from your DP must be serial-numbered with numbers unique to your account and recorded in the DP's system. Whenever there is a debit or credit in an A/C the DP is supposed to send a transaction statement and a holding statement to the investors within a fortnight. In case there have been no transactions they generate just a holding statement every quarter. So check for the statements regularly since all DPs are not very punctual about sending transaction and holding statements. These statements will ensure that you’re A/C is proper.

There is an additional safety feature available with the DPs. You can freeze your account on the debit side if you do not want to sell the shares from your account, this will ensure that no debit is done in your account. Your account will continue to receive credits arising from fresh purchases but no debit will be permitted. A special form that you can get from the DP is executed that instructs your DP to freeze your account (only for the debit side or completely). When you want to sell your shares you can execute the same form to unlock your account.

4. Customer Service DPs should have adequate customer service facilities. This is one of the most important aspects while deciding your DP. At some time or other you will need some information on your account. Your DP

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should be able to provide you quick service, so check whether your DP has a dedicated customer service department. If you are not happy with the service, you get from your DP or you are not sure that your shares will be safe you should not think twice of taking your shares to another DP.

2.4: TRADING Trading in dematerialized securities is quite similar to trading in physical securities. The major difference is that at the time of settlement, instead of delivery/ receipt of securities in the physical form, it is done through account transfer. An investor cannot trade in dematerialized securities through his DP. Trading at the stock exchanges can be done only through a registered

trading

member

(broker)

of

the

stock

exchange

irrespective of whether the securities are held in physical or dematerialized form. DPs role will only be to facilitate settlement of trade in the dematerialized form, by transferring securities from and to the account of the investor, for selling and buying respectively. Trading in dematerialized securities is presently available at NSE, BSE, CSE, DSE,LSE, MSE, ISE & OTCEI. These exchanges have a segment exclusive for trading in dematerialized securities and a segment where trades could be settled either in the physical or in the dematerialized form as per the choice of the delivering client. In unified (erstwhile - physical) segment securities can be delivered

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either in the physical form or in the dematerialized form at the choice of the delivering party. However, securities that have to be mandatorily settled in demat form (both by institutional investors & all category of investors) cannot be settled in physical form. Also for securities that have to be mandatorily settled in demat form by all categories of investors the concept of market lot is eliminated i.e. the tradable lot is one share from the date they become compulsory.

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2.5: SETTLEMENT The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/ clearing house (CH) of the corresponding stock exchanges. While the settlement of dematerialized securities is effected through depository, the funds settlement is effected through the clearing banks. The clearing members directly with the CC/ CH settle the physical securities. Exclusive Demat segment follows rolling settlement (T+5) cycle and the unified (erstwhile - physical) segment follows account period settlement cycle. In case of rolling settlement cycle, the account period is reduced to one day. •

In case of settlement of trades done in exclusive Demat segments, the pay-in and pay out of funds and securities are effected on the same day afternoon and evening (same day) thus reducing the blockage of funds and limiting exposure to the clearing corporation.

•

Settlement of funds is effected through the clearing banks and depository plays no role in this.

•

Settlement of securities is effected through NSDL depository system.

•

Clearing and settlement of the regular market trades is affected through the clearing members of the clearinghouses of respective stock exchanges. All trading members of stock exchanges are clearing members of clearing houses. In

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addition, for settlement of institutional trades, custodians are also allowed to act as clearing members. •

Clearing members of clearinghouse, dealing in dematerialized securities are expected to open a clearing account with any DP for the purpose of settling trades in dematerialized securities. As, in the mixed (unified) segment, there is a possibility for all clearing members to receive dematerialized securities, they are expected to open clearing accounts.

•

If there is any short delivery at the time of pay-in of securities, these short positions are auctioned in the Demat segment as done in the Unified (erstwhile-physical) segment.

For trades executed on Wednesday (TD 1): •

Final/ Net obligation statement download - Friday (T+2nd working day)

•

Settlement day (SD 1) i.e. pay in and pay out of funds and securities - next Wednesday (T+5th working day)

•

Auction trade day (ATD 1) - next Thursday (T+6th working day)

•

Auction settlement day (ASD 1) - Monday (2nd working day from auction trade day i.e. T+8th working day)

Similarly, for trades executed on Thursday (TD 2): • • • •

Final/ Net obligation statement download - Monday (T+2nd working day) Settlement day (SD 2) - next Thursday (T+5th working day) Auction trade day (ATD 2) - next Friday (T+6th working day) Auction settlement day (ASD 2) - Tuesday (2nd working day from auction trade day i.e. T+8th working day)

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2.6: CHARGES 2.6(a): NSDL Charges for DPs NSDL does not charge the investor directly but charges its DPs, who are free to charge their clients. NSDL charges its DPs under the following heads: 2.6(a)-1: Transaction Fees : 1. Market Trade : Sale

- nil;

Purchase - 5 basis points (i.e. 0.05% of the value of net receipts to a clearing members account) 2. Off Market Trade: Sale

- nil;

Purchase - 10 basis points (i.e. 0.1% of value of securities). 2.6(a)-2: Custody Fees : 3.5 basis points p.a.(i.e. 0.035% p.a. of average value of securities)

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CHAPTER – 3

OBJECTIVE OF THE PROJECT OBJECTIVE OF THE PROJECT REPORT

The objective of my project is divided into two main parts:

1. Comparison of DEMAT services of ICICI & IDBI banks. In this objective services rendered by ICICI and IDBI are compared and according which the result that which is better among the two is found. 2. Awareness about DEMAT a/c. Second

objective

gives

the

purpose

of

drawing a questionnaire in which awareness about handling a Demat A/C among salaried and self employed were found. This objective includes sub objectives which are as follows:

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 How many persons interested in investment?  How many persons are dealing with securities?

 Which investment style is most preferred by investors?  How many persons have Demat a/c?  What are the merits and demerits of opening a Demat a/c?

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CHAPTER – 4

METHODOLOGY

 Details of ICICI Demat services  Details of IDBI Demat services

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Dematerialisation (DEMAT) Dematerialisation is a process in which the physical certificates of an investor are taken back by the company. The registrar destroys the shares and equivalent number of shares are credited in the electronic holdings of the investor. This is done at the request of the investor. The Process NSDL

6

2

Depository Participant

5 1 7 3 Registrar

1.

4

Investor

Surrendering of certificate to Depository Participants for

dematerialisation. 2.

NSDL is informed by the DP through electronic connectivity.

3.

Original share certificates are submitted to the registrar by the

DP. 4.

The request for dematerialisation from NSDL to the register.

5.

The registrar credits an equivalent number of shares in the

account and informs NSDL. 6.

The NSDL updates its own account and the depository

participants are informed. 7.

The depository agent credit it in the account of the investor and

the same is informed to the investor.

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Rematerialisation Sometimes the investor may like to convert his electronic holdings back into physical share certificate. The process undertaken for this purpose is called rematerialisation. The investor has to make a request to the depository participant for rematerialisation. The depository participant puts forward the request to NSDL after verifying whether the investor in having necessary security balances. NSDL in turn will intimate the registrar who prints the certificate and dispatch the same to the investor. The certificate has a new range of certificate numbers and new folio number. The Process NSDL

2

Depository5 Participant

4 1 3 Registrar

6 Investor

1.

Investor request the DP for rematerialisation.

2.

The depository participant informs it to the NSDL.

3.

NSDL intimates the Registrar.

4.

The Registrar of the company prints certificates with new

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number and informs NSDL. 5.

NSDL adjusts its account and passes on the details to the DP.

6.

The certificates are dispatched to the investor.

Service Charges The stamp duty of 0.50 per cent payable in a paper-based system is eliminated in the demat environment. The depository participants charge on an average 0.15 per cent of the market price of the stock per annum as custodial charges. The depository participants have to pay 0.035 per cent to NSDL (reduced from the earlier 0.07 per cent from August 1997). These custodial service charges vary from one depository participant to another. HDFC Bank charges as much as 0.18 per cent per annum as holding charges, but there are others, such as Action Financial Services that charges just 0.09 per cent per annum. Apart from custodial charges there are account opening charges up toRs,1,000 charged by some depository participants. This is besides, the transaction charges which range from 0.02-0.15 per cent buy transactions and from 0-0.12 per cent on sell transactions. NATIONAL SECURITIES DEPOSITORY LIMITED To meet the capital requirements companies turn towards the capital market that is more flexible and responsive source of funds. The savers of Indian economy a decade ago held simple pass books of the post office and banks. Today they hold plenty of paper or marketable financial assets or securities. The stock brokers have to move large number of paper certificates to give delivery on he half of

36

their clients. Each transfer of a deed involves different manual checks. Many of the share transfers are rejected because of some technical defect and investors who sell their shares often, wait a couple of months before they receive their money. Because of this tiring procedure, many of the foreign institutional investors restrict their trading with sensex scrip’s. To remove these difficulties, National Securities Depository Limited was established. NSDL is an organisation promoted by the Industrial Development Bank of India the Unit Trust of India and the National Stock Exchanges of India Ltd., to provide electronic depository facilities for securities traded in the equity and the debt market. The depositories’ ordinances promulgated by the Government of India in September 1995 enabled the setting up of multiple depository system. The securities and Exchange Board of India (SEBI) issued the guidelines for depositories in May 1996. The Bill was passed by the parliament in July 1996. NSDL was registered by SEBI on June 7, 1996.

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THE FUNCTIONING NSDL performs the following functions through its various participants a)

Enable surrender and withdrawal of securities to and from the

depository. b)

Maintains investor’s holdings in the electronic form.

c)

Effects settlement of securities traded on exchanges.

d)

Carries out settlements of trader that have not been done on

the stock exchanges.

NSDL (DP) Depository Participant can be a public financial institution, bank, custodian, registered stock broker or a NBFC subject to approval from the depository company and the SEBI, Brokers and NBFCs are required to have a minimum net worth of Rs. 50 lakhs. DP has to pay a security deposit of Rs. 10 lakhs and an admission fee of Rs. 25,000 to NSDL. The depository participants are likely to pass on these charges to the investors.

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II - METHODOLOGY SECTION - A

DETAILS OF ICICI DEMAT SERVICES 

Demat services & their charges

 NSDL charges  Conditions

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Two Options for the recovery of Demat services charges Option 1: Customers, who have only a Depository relationship with ICICI Bank, will be required to pay an advance fees for each demat account, which will be adjusted against service charges. The customer will also undertake to replenish the balance immediately when it falls below the threshold amount, as specified amount, as specified below:

Advance Amount Threshold

Standard / Bond Rs. 2,500/Rs. 1,000/-

Frequent Trader Rs. 7,500/Rs. 2,000/-

Amount Option 2: Customers who have a banking relationship with ICICI Bank will provide a debit authorization for the recovery of service charges.

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NSDL charges : NSDL charges are chargeable extra at actual. Present NSDL Charges are: Sell: Market and Off-Market

Rs. 8/- per debit instruction (nil for commercial paper and short –term debt

instruments) Rematerialization Rs. 10/- per certificate Pledge Creation Rs. 25/- per instruction  Conditions:

1) The value of shares and charges are calculated as per NSDL formula and rates. 2) There will be a charge of Rs. 100/- for dishonor of any cheque or unsuccessful attempt to recover payment through direct debit or ECS. The depository services are liable to discontinuation if ICICI Bank is unable to recover charges from the customer, fro any reason whatsoever. In such cases, there will be a charge of Rs. 250/- for resumption of services and the services will be resumed after a minimum of three working days from the date of receipt of request at Central Processing Office, Mumbai. 3) Any service that is not indicated above will be charged separately as per the rates applicable from time to time.

41

4) ICICI Bank reserves the right to revise the tariff structure from time to time, with a notice of 30 days. The notice may be given by ordinary post or by an advertisement in a national daily. 5) If the Demat Account is closed during the year, no pro-rata refund of Annual Charge will be made.

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ICICI BANK DEMAT CHARGES Charge Head Frequent/Sub-brokers

Standard

Charges

Charges A/c Opening

Nil

Nil

Annual Services Charges

Rs. 500/- (450/-for Rs. 1250/Customers receiving statements

by e-mail) Agreements Stamp Paper Buy-Market and Off-Market

Rs.100/Nil

Rs.100/Nil

Sell-Market and Off-Market (% of transaction value of each ISIN)Max. Rs. 500 for debit instruments • For trade done on www. icicidirect.com Nil Nil • For instruction submitted through Internet (e-instructions) 0.04% (Min. Rs. 10/-) 0.02% (Min. Rs. 5/-) • For instruction submitted through Call Centre (e-instructions) 0.04% (Min. Rs. 15/-) 0.02% (Min. Rs. 10/-) • For instruction submitted through Branches 0.04% (Min. Rs. 30/-) 0.02% (Min. Rs. 15/-) Rejection/fails

Rs. 30/-

Rs. 15/-

Extra charges for processing of instructions submitted on the execution date late (accepted at Client’s risk) • For instruction submitted through Internet (e-instructions) Nil Nil • For instruction submitted through Call Centre (e-instructions) Nil Nil

43

• For instruction submitted through Branches Rs. 10/- per ISIN

Rs. 10/-per ISIN

Dematerialisation • For each request form Rs. 35/• Extra for each certificate Rs. 2/Rematerialisation (For each request form)Rs. 20/Closure of Account Nil

Rs. 35/Rs. 2/Rs. 20/Nil

Pledge Creation/Closure/Confirmation/Invocation (% Of value for each ISIN in each request) • If ICICI Bank is the counter party (Min. Rs. 15/-)0.02% (Min. Rs. 15/-) • If ICICI Bank is not the counter party (Min. Rs. 30/-)0.02% (Min. Rs. 30/-) Additional Account Statements

0.02% 0.04% Rs. 20/-

Rs. 20/-

NSDL charges are chargeable extra at actuals. Present NSDL Charges are: Sell – Market and Off-Market Rs. instruction (nil for commercial paper & short-term debt instruments) Remat flat fee of

6/-

per

debit

Rs. 10 for every hundred securities or part thereof; or a Rs. 10 per certificate whichever

is higher. Pledge Creation

Rs. 25/- per instruction

44

Conditions: • The value of shares and charges is calculated as per NSDL formula and rates.

• There will be a charge of Rs. 100/- for dishonor of any cheque or unsuccessful attempt to recover payment through direct debit or ECS. The depository services are liable to discontinuation if ICICI Bank is unable to recover charge from the customer for any reason whatsoever. In such cases there will be a charge of Rs. 250/- for resumption of services and the services will be resumed after a minimum of three working days from the date of receipt request at Central Processing Office. Mumbai. • Any service that is not indicated above will be charged separately as per the rates applicable from time to time. • ICICI Bank reserves the right to revise the tariff structure from time to time, with notice of 30 days. The notice may be given by ordinary post or by advertisement in a national daily. • If the Demat Account is dosed during the year, no pro-rate refund of Annual Service Charge will be made.

45

SECTION - B

DETAILS OF IDBI DEMAT SERVICES

 Services & its charges  Statement & its charges  Transaction & its charges  Pledge & its charges  Lending & Borrowing & its charges  Other & its charges  Additional note

46

IDBI BANK DEMAT CHARGES DEMAT SERVICES AND CHARGES SCHEDULE FOR CORPORATE WITH NSDL DEMAT ACCOUNT SERVICES Account Opening Account Maintenance for idbi bank SB/Current AC Holders (Payable in advance in the month of account opening and on anniversary basis every year thereafter) Account Maintenance for non-idbi bank account holders (Payable in advance in the month of account opening and on anniversary basis every year thereafter) STATEMENTS Quarterly statement by post Fortnightly statement by post (only if transactions take place during the period) Monthly statement by email On request statement on IVR On request statement by email for requests logged over IVR On request statement at the branch O request statement by post (address outside India) Optional Monthly Holding Statement (payable in advance in the month of account opening and on anniversary basis every year thereafter) TRANSACTIONS Dematerialisation of EQUITY Instruments Dematerialisation of DEBT instruments

AMOUNT

MINIMUM (where applicable)

FREE (Stamp duty as applicable) Rs. 350/- per annum

Rs. 500/- per annum

FREE FREE FREE FREE FREE Rs. 25 each Rs. 500 each Rs. 200 per annum

0.2% of face value, plus postage Rs. 2 per certificate,

Postage Rs. 35 per request Postage Rs. 35 per

47

pus postage 0.04% of market value

Rematerialisation of Securities Market Equity BUY transactions Market Debt BUY Transactions Market Equity SELL Transaction

FREE FREE 0.04% of market value*

Market Debt SELL Transactions

0.04% of market value*

Off Market Equity BUY Transaction Off Market Debt BUY Transaction Off Market Equity SELL Transaction

FREE FREE 0.04% of market value*

Off Market Debt SELL Transactions

0.04% of market value*

Inter-Depository Transfer (Buy) Inter-Depository Transfer (Sell)

FREE 0.04% of market value*

Late Instruction upfront**

Fees,

payable 0.25% of market value*

Freeze De-Freeze

Rs. 30 per transaction Rs. 30 per transaction Rs. 30 per transaction Rs. 30 per transaction Rs. 30 per transaction Rs. 50 per instruction

Rs. 100 per instruction Rs. 100 per instruction

PLEDGE Pledge Creation

0.05% of market value*

Pledge Closure

0.05% of market value*

Pledge Invocation

0.15% of market value*

LENDING & BORROWING Securities Lending / Borrowing Initiation Securities Lending / Borrowing Confirmation Securities Recall / Repay Initiation

request Rs. 20 per certificate

Rs. 50 per transaction Rs. 25 per transaction Rs. 25 per transaction

Rs. 50 per instruction Rs. 50 per instruction Rs. 50 per instruction

48

Securities Recall / Repay Confirmation

Rs. 50 per instruction

OTHERS Service Tax (Subject to change, as prescribed by Tax Authorities from time to time)

12.24% of charges for Depository Services

# IDBI Bank SB/Current A/c holders must provide Standing Instructions for recovery of the service charges. * For calculation of charges, market value of transaction / holding will be as per NSDL ** All instructions for transfer must be received at respective branches of the Bank on or before 4.00 pm of previous working day of the pay in /execution date. Instructions received after the above deadline will be accepted only at client’s risk. Such late instructions will invite additional charges as specified in the table above. NOTE: Bills for service charges will be raised monthly. Charges quoted above are for the services listed. Any service not listed will be charged separately as per Bank’s policy.

49

IDBI BANK DEMAT CHARGES DEMAT SERVICES AND CHARGES SCHEDULE FOR INDIVIDUALS & CORPORATES WITH CDS DEMAT ACCOUNT FROM MARCH, 2005 SERVICES Account Opening (for idbi bank savings & current account holders) Custody Charges Account Maintenance for idbi bank SB/ Current AC Holders $ (Payable in advance in the month of account opening and on anniversary basis every year thereafter) Account Maintenance for non-idbi bank account holders $ (Payable in advance in the month of account opening and on anniversary basis every year thereafter) STATEMENTS Quarterly statement by post Fortnightly statement by post (only if transactions take place during the period) Monthly statement by email On request statement on IVR On request statement by email for requests logged over IVR On request statement at the branch On request statement by post (address outside India) Optional Monthly Holding Statement (payable in advance in the month of account opening and on anniversary basis every year thereafter) TRANSACTIONS Dematerialisation of EQUITY Instruments Dematerialisation of DEBT instruments

AMOUNT

MINIMUM (where applicable)

FREE (Stamp duty as applicable) FREE Rs. 350/- per annum#

Rs. 500/- per annum

FREE FREE FREE FREE FREE Rs. 25 each Rs. 500 each Rs. 200 per annum

0.2% of face value, plus postage Rs. 2 per certificate, pus postage

Postage Rs. 35 per request Postage Rs. 35 per request

50

Dematerialization of Securities

0.04% of market value

Market Equity BUY transactions Market Debt BUY Transactions Market Equity SELL Transaction

FREE FREE 0.04% of market value*

Market Debt SELL Transactions

0.04% of market value*

Off Market Equity BUY Transaction Off Market Debt BUY Transaction Off Market Equity SELL Transaction

FREE FREE 0.04% of market value*

Off Market Debt SELL Transactions

0.04% of market value*

Inter-Depository Transfer (Buy) Inter-Depository Transfer (Sell)

FREE 0.04% of market value*

Late Instruction upfront**

Fees,

payable

0.25% of market value*

Freeze De-Freeze PLEDGE Pledge Creation

0.05% of market value*

Pledge Closure

0.05% of market value*

Pledge Invocation

0.15% of market value*

OTHERS Service Tax (Subject to change, as prescribed by Tax Authorities from time to time)

Rs. 20 per certificate Rs. 30 per transaction Rs. 30 per transaction Rs. 30 per transaction Rs. 30 per transaction Rs. 30 per transaction Rs. 50 per instruction

Rs. 100 per instruction Rs. 100 per instruction Rs. 50 per transaction Rs. 25 per transaction Rs. 25 per transaction

12.24% of charges for Depository Services

$ For Corporate Account, and additional AMC of Rs. 500 p.a. payable to CDSL will be charged. # IDBI Bank SB/Current A/c holders must provide Standing Instructions for recovery of the service charges.

51

* For calculation of charges, market value of transaction / holding will be as per NSDL ** All instructions for transfer must be received at respective branches of the Bank on or before 4.00 pm of previous working day of the pay in /execution date. Instructions received after the above deadline will be accepted only at client’s risk. Such late instructions will invite additional charges as specified in the table above. NOTES: Bills for service charges will be raised monthly. Charges quoted above are for the services listed. Any service not listed will be charged separately as per Bank’s policy.

52

DEMAT SERVICES AND CHARGES SCHEDULE EFFECTIVE MAY 01, 2005 SERVICES

CHARGES

MINIMUM (Where applicable)

Account Opening (for IDBI bank savings & current account holders)

FREE (Stamp duty as

Account opening (for non

applicable) Rs. 200

IDBI account holders)

(Plus stamp duty as

Custody Charges

applicable) Rs. 1.25 per ISIN per

Rs. 7.50 per

month in the Demat

account per

Account Maintenance for

account Rs. 250/- per annum

month

IDBI bank SB/Current A/C Holders (Payable in advance in the month of account opening and on anniversary basis every year thereafter) Account Maintenance for

Rs. 400/- per annum

non IDBI bank A/C Holders (Payable in advance at the time of account opening and on anniversary basis

53

every year thereafter) STATEMENTS

CHARGES

MINIMUM (Where applicable)

Quarterly statement by post Fortnightly statement by post

FREE FREE

(only if transactions take place during the period) Monthly statement by email On request statement on IVR On request statement by

FREE FREE FREE

email for requests logged over IVR On request statement at the

Rs. 25 each

branch Optional monthly Holding Statement (payable in advance in the month of account opening and on anniversary basis every year thereafter

TRANSACTIONS

CHARGES

MINIMUM (Where

Dematerialization of EQUITY instruments

0.2% on face value, Plus postage

applicable) Postage Rs. 35 per

54

request Dematerialization of DEBT instruments

Rs. 2 per certificate,

Postage

Plus postage

Rs. 35 per

Rematerializtaion of

0.40% of market

request Rs. 20 per

Securities Market Equity BUY

value 0.02% of market

certificate Rs. 20 per

Transactions Market Debt BUY

value 0.02% of market

scrip Rs. 20 per

Transactions Market Equity SELL

value 0.02% of market

scrip Rs. 20 per

Transactions Market Debt SELL

value 0.02% of market

scrip Rs. 20 per

Transactions Off Market Equity BUY

value 0.02% of market

scrip Rs. 20 per

Transactions Off Market Debt BUY

value 0.02% of market

scrip Rs. 20 per

Transactions Off Market Equity SELL

value 0.02% of market

scrip Rs. 20 per

Transactions Off Market Debt SELL

value 0.02% of market

scrip Rs. 20 per

Transactions Late instruction Fees,

value 0.25% of market

scrip Rs. 50 per

payable upfront Inter-Depository Transfer

value 0.02% of market

instruction Rs. 20 per

(Buy) Inter-Depository Transfer

value 0.02% of market

scrip Rs. 20 per

(Sell) Freeze

value Rs. 100 per

scrip

instruction

55

De-Freeze

Rs. 100 per

PLEDGE

instruction CHARGES

MINIMUM (Where

Pledge Creation

0.05% of market

applicable) Rs. 50 per

Pledge Closure

value 0.05% of market

Transaction Rs. 25 per

Pledge Innovation

value 0.15% of market

Transaction Rs. 25 per

value LENDING & BORROWING CHARGES

Transaction MINIMUM (Where applicable)

Securities lending /

Rs. 50 per instruction

Borrowing Initiation Securities Lending /

Rs. 50 per instruction

Borrowing Confirmation Securities Recall / Repay

Rs. 50 per instruction

Initiation Securities Recall / Repay

Rs. 50 per instruction

Confirmation OTHERS

CHARGES

MINIMUM (Where applicable)

Service Tax (Subject to change, as

10.2% of charges for Depository Services

prescribed by Tax Authorities from time to time)

56

57

Additional Note:  IDBI Bank SB / Current A/C holders must provide Standing Instructions for recovery of the service charges.  For calculation of charges, market value of transaction / holding will be as per NSDL.  All instructions for transfer must be received at respective branches of the bank, one day before the date of execution, not later then 4 pm of the previous day. Instructions received after the above deadline will be accepted only at client’s risk. Such late instructions will invite additional charges as specified in the table above.

NOTES: 1) Bills for service charges will be raised monthly. Charges quoted above are for the services listed. Any service not listed above will be charged separately as per Bank’s policy.

2) Statement of Account will be mailed monthly for accounts where transactions have place during then period, for FREE.

58

SECTION – C WHICH IS BETTER? ICICI OR IDBI

 Differences

59

DIFFERENCES Through personal interview, it is found that ICICI is best among the two. On the basis of:

DIFFERENCES Sr.No. ICICI

IDBI

1

Online trading facility

It is a pioneer in providing

Initially it was ICICI which

trading, DEMAT &

introduce online trading

investment service.

2.

Annual service charges ICICI has charges of Rs. 550

IDBI has Rs 650,

only 3

Speak to transfer It is an USP of ICICI bank, in which securities in any other bank DEMAT A/C can be transferred to ICICI Demat A/C in

4

a phone itself Web trade DEMAT In it ICICI itself work as a broker for its investor through eye direct, costing Rs. 750 for it

5

More number of DEMAT A/C

Where in IDBI there are

ICICI bank are nearly about 8000 approx. 6000 a/c’s..

60

RESEARCH METHODOLOGY

RESEARCH OBJECTIVE: The objective of this research is as follows:  To know the functioning of stock exchange (Stock market).  To know, how the stockbrokers earn profit by providing services to the investors.  To study that which type of opportunity looking by stock brokers in coming years.  To find out new avenues of opportunity of stock broking companies

61

Research design Descriptive research design includes survey & fact findings inquiries of different kinds. The major purpose of descriptive research is description of state of affairs as it exits at present.

Sample design

: Simple random sampling

Simple random sampling also known as probability sampling Under this sampling design every item of universe has an equal chance of inclusion in sample. It is say to a lottery method.

Collection of Data Primary data – Questionnaire Secondary Data –Newpaper, website ,magazine

Sample size

: - The sample size of research study is 60

62

CHAPTER – 5

ANALYSIS IN THE PROJECT

63

ANALYSIS IN THE PROJECT

To clear my second objective that is ‘Awareness program on Demat’ it become necessary to analyze among salaried and self-employed persons answers for following questions arose for it. They are: (I)

To find out the number of persons investing or interested in investing, in securities.

(II)

How much does a persons have knowledge about DEMAT A/C?

(III)

To find out the number of persons having or wanted to have DEMAT A/C

(IV) Point of view of investor’s regarding DEMAT services provided by the bank.

64

CHAPTER – 6

FINDINGS IN THE PROJECT Q.1: Are you interested in investment? Yes No Total

55 5 60

Are you interested in investment? no, 5, 8%

yes no ye s , 55, 92%

Interpretation: The given bar diagram shows that 55% of respondents are willing to invest their money, 5% are not interested.

65

Q.2: What percentage of your annual income you can keep for investment? More than 5% More than 10% More than 15% More than 20% Above

9 21 16 10 4

Share of investment in annual income 7% 15% 17%

More than 5% more than 10%

27%

34%

More than 15% More than 20% above

Interpretation: The given pie chart shows that (out of 60 respondents), the percentage share of investment from annual income is more than 10%

maximum

more than 5%

average no. Of people

more than 20%

average no. Of people

Q.3: In which category of income you will describe yourself?

66

Upper level income Middle level income Low level income

10 45 5

In which income level you fall ?

8% 17% Upper level income

75%

Middle level income low level income

Interpretation: The given bar chart shows that maximum respondents are fall in to the middle income group, which shows that chances of investment are bright because they want on extra source of fund generation.

67

Q.4: Are you dealing or interested in dealing with any security? Yes No

45 15

Are you interested in investing in securities?

no 25% yes 75%

yes no

Out of 60 respondents 45 are willing to invest in securities like shares debentures Mutual funds etc. & 15 are not interested at all.

68

Q.5: What type of investment style are you looking for? Bonds, debenture etc. Shares & warrants Mutual funds All of these None of these

5 28 15 6 6

What type of investement style you prefer?

bonds, debenture etc. shares & warrants mutual funds

10% 8% 10% 25%

47%

all of these none of these

Approx. half of the persons want to invest in shares & warrants. It may be the reason that they are the oldest investment style and bears low risk than any other.

69

Q.6: What type of occupation do you have? Salaried Self employed Retired

51 6 3

Whic h type of occupation you have ?

5% 10%

Salaried Self empoyed Retired 85%

Mostly there are salaried persons among all. There are near about 85% of the persons are salaried once.

Q. 7: Which of these best describes your job?

70

Managerial Professional Clerical Skilled Manual worker Retired Other

15 21 6 6 3 3 6

Description of your job.

Managerial

10% 5% 5%

25%

professional Clerical

10%

Skilled

10% 35%

mannual worker retired other

There are managerial and professional persons are more in number than any other. Where professionals are 21 in number and managerial are 15 in number.

Q.8: Do you know about DEMAT ACCOUNT?

yes

20

71

No

40

yes 33% yes No No 67%

Due to less knowledge about DEMAT a/c 20 person are aware & 40 person are not aware the DEMAT A/C

Q.9: Do you have a DEMAT A/C?

Yes

12

72

No

48

Do you have a DEMAT account? yes 20%

yes

No 80%

No

Due to less knowledge about Demat A/C percentage of having Demat A/C is less in number. Therefore, only 12 persons are having Demat A/C among which many of them doesn’t have full knowledge about it.

Q.10: If yes, then where? Banks(ICICI & IDBI) Broker DP

8 2 2

73

DP 17%

Banks

Broker 17%

Broker DP Banks 66%

As the diagram and table shows there are very less persons who are having Demat A/C, and among them all have their A/C'S in Bank only.

Q.11 If no,then where do you want to open? Broker Bank(ICICI & IDBI) DP

5 30 5

74

DP 13%

Broker 13%

Broker Bank DP

Bank 74%

Where persons have no Demat A/C'S i.e.; 40 persons among 60, Every 5 wants to open their A/C'S through broker & DP and 30 Persons wants to open it personally in banks.

Q.12: In today’s investment management is it necessary to have a DEMAT A/C for investors?

75

Yes No Can’t say

24 7 29

Today DEMAT accounts are necessary or not?

Ye s 40%

Can't s ay 48%

Yes No

No 12%

Can't say

Due to less knowledge percentage of can’t say is more, but many of the persons give their answers in yes.

76

Q.13: Do you think your securities will be safe in DEMAT A/C? Yes No Can’t say

36 0 24

Your securities will be safe in DEMAT account or not.

Yes 40%

No 60%

Can't say

0%

60% persons think that securities will be safe in Demat A/C'S than any other place as it is totally a paper less work and there is no case of misplace of it.

77

Q.14: In your point of view DEMAT A/C is for? Easy to selling security Purchase in primary market Helps in fast money growth Helps in income & money growth Helps in stable income

20 7 4 16 13

In your point of view DEMAT account is for? Securities

22%

32%

27% 7%

12%

Purcase in prim ary m arket Helps in fast m oney grow th Helps in incom e & m oney grow th Helps in stable incom e

In many persons point of view Demat A/C is generally for two major thinks i.e. they are for easy in selling securities and helps in earn income & also grow money, as both are scoring equal number of response. Other also thinks that it helps in purchase in primary market and helps in earn a stable income.

78

Q.15: How frequently you are going to use your DEMAT a/c? Daily Weekly Fortnightly

1 3 8

How frequently you use your DEMAT account?

9% Daily

27% 64%

Weekly Fortnightly

24 persons prefer to use their A/C'S monthly in a given period, where 21 persons were use it fortnightly, 9 were going to use there A/C'S weekly and rest of all were use it daily.

79

CHAPTER – 7

CONCLUSION OF THE PROJECT

 Conclusion from analysis  Learnt from analysis

80

CONCLUSION

1) Hardly 5% investor (among salaried and self-employed) knows about DEMAT a/c. 2) Online trading facility given by bank is beneficial to investors, through which they can easily transact from anywhere in the country. 3) Without DEMAT A/C no sale of shares and warrants can take place. 4) More than 5 lakh people have opened new DEMAT A/C'S in this boom period of stock market. 5) Still there are many investors who are having share/ warrants in their hands but not having Demat A/C'S due to lack of knowledge in services provided by bank’s.

81

LEARNT FROM ANALYSIS From all the analysis done through questionnaire and other sources of generating knowledge about Demat A/C and services provided in it. It is drawn out that where there are merits of opening a Demat A/C there are certain demerits also.

Merits: a) Safe for securities: From research and analysis I have found

that securities will be safe in Demat A/C’s. As by keeping securities in such A/C'S investors does not have to bother about there securities selling and also there is no chances of loss of certificates. b) Easy in selling securities: Through training I have got a result

that Demat A/C helps in selling securities of investors more easily than any other sources. When a n investor keeps its share in a Demat A/C then its banks responsibility to sell that security on the action of investor.

82

c) Fast money growth: In a Demat a/c, money invested on shares

/ warrants by an investor grows, if it is used by him frequently as per the norms of share market. d) Purchase in primary market: Basically Demat services doesn’t

provide services of purchasing shares through it, accept the shares will be purchased in primary market, which helps investors. e) Paperless work: Before facility given by banks to open a Demat

A/C for keeping their shares in such a/c’s, investors keep it as a share certificate which makes some time worry about loss of share certificate. But through Demat A/C it is no more as in it there is no need of doing paper work. Now, government has made it compulsory to do trading through Demat A/C only. This means now any share/warrant can be sold only through Demat A/C’s.

83

Demerits: a) More enquiries: For opening a Demat A/C in bank, they require

lots of information about an individual for which they enquire more and more to them. b) Charges applied: Charges for opening a Demat A/C in a bank is

very high, there are the charges like transaction charges, statement charges, pledge charges, etc. c) Risky in terms of operation:

As in the stock exchange when

their will be fall or rise in the price of shares / warrants it is not defined, similarly when an investor open a Demat A/C he does not know how long its profit will be occur. d) Technical in nature: Demat services are fully system based

services. Today the world of new technology the process of Dematerialization is based on it which may new to an individual 7 makes the process more technical in nature. e) Lack of basic awareness: Due to its technicality the procedure

of handling a Demat A/C creates many problems for an investor. As it is new an investor it create unawareness among them. APPENDIXES

84

Destruction of Certificates: The issuer / R&T Agent may share the certificates after making entries in the register of Destroyed Certificates. Share Holder Depository Participant Opens Client Account Number Dematerialization Request Form (DRF) In duplicate to DP DP to Depository (NSDL) (For Dematerialization) DRF+ Share Certificate To Issuer Company/STA (in &days) Issuer Company/STA records and authorities. Electronic Credit (within 15 Days) STA intimates DP Authorizing Dematerialization of Investor’s physical holdings and adjustment of Physical holdings NSDL will add Dematerialized holdings to Beneficial Owner’s Account

85

QUESTIONNAIRE

Name: __________________________________________________ Address: __________________________________________________ Occupation: _____________________________________________________________ Telephone: _________________________ Date: ________________________ Questionnaire for Awareness of DEMAT a/c Quo.1: Are you interested in investment? (a) Yes (b) No Quo.2: What percentage of your annual income you can keep for investment? (a) < 5% (b) < 10% (c) <15% (d) < 20% (e) < 25% (f) Above Quo.3: In which category of income you will describe yourself? (a) Lower income group (b) Middle income group (c) Higher income group Quo.4: Are you dealing or interested in dealing with any security? (a) Yes (b) No

Quo.5: What type of investment style are you looking for? (a) Bonds, debentures & debit investment

86

(b) Shares & warrants (c) Mutual funds (d) All of these (e) None of these Quo.6: What type of occupation do you have? (a) Salaried (b) Self employed Quo.7: Which of these best describes your job? (a) Managerial (b) Professional (c) Clerical (d) Skilled (e) Manual worker (f) (j) Other (PLEASE WRITE IN) Quo.8: Do you know about DEMAT a/c? (a) Yes (b) No Quo.9: Do you have a DEMAT a/c? (a) Yes (b) No Quo.10: If yes, then where? (a) Broker (b) Bank (c) Depository Participant (DP) [Note: Kindly mentions DP & Bank name] Quo.11: If No, then where do you want to open? (a) Broker (b) Bank (c) Depository Participant (DP) [Note: Kindly mentions DP & Bank name] Quo.12: In today’s investment management is it necessary to have a DEMAT A/C for investors? (a) Yes (b) No Quo.13: Do you think your securities will be safe in DEMAT a/c? (a) Yes (b) No (c) Can’t say

87

Quo.14: In your point of view DEMAT A/C is for? (a) Easy in selling securities (b) Purchase in primary market (c) Helps in fast money growth (d) Helps in earn income & also grow money (e) Helps in earn a stable income Quo.15: How frequently you are going to use your DEMAT a/c? (a) Daily (b) Weekly (c) Fortnightly (d) Monthly Quo.16: What are the merits and demerits of DEMAT A/C in your views? Merits Demerits (a) ____________________________ (a)__________________________ (b) ____________________________ (b)__________________________ (c) ____________________________ (c) __________________________

Signature of Respondent: _________________________

88

BIBLIOGRAPHY

SOURCES OF INFORMATION • Books:  Bhalla V. K., Investment Management, S.Chand

• Internet: 

http://www.nsdl.co.in/



http://www.icicidirect.com



http://www.timebankindia.com

89