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Question
State, with reason, whether the following statement is True or False.
Share transfer in depository mode is fast and economical.
Options
True
False
Solution
True
Reasons:
(1) Dematerialization is the process by which securities like shares are converted into electronic form from physical form.
(2) It results in paperless procedures with respect to holding of shares, handling them or transferring them.
(3) It is an account based system where the dealings happen electronically and not physically. It saves a lot of time, efforts and hassles.
(4) It results in very fast and quick transactions due to direct credit.
(5) This also leads to minimizing cost.
(6) Payments in case of transfer, dividend etc. also happen much faster.
(7) So demat is a very simple, easy and time saving process.Thus, share transfer in depository mode is fast and economical.
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