Question

Study the following case/situation and express your opinion.

Mr. Z holds 50 shares of Peculiar Company Ltd. in physical mode and wishes to convert the same into electronic mode.

1. Mr. Z holds a Saving Bank Account with CFDH Bank Ltd. Can he deposit his shares in this account for demat?
2. What type of account is needed for the same?
3. Is it the RBI which will be the custodian of shares of Mr. Z after demating?

Answer 1

1. No, Mr. Z cannot deposit his shares in his Savings bank account for demat. He must open a demat account with a Depository Participant (DP) to convert shares electronically.
2. Mr. Z needs a demat account with a Depository Participant (DP) to convert his physical shares into electronic form.
3. No, after demating, NSDL or CDSL will be the custodian of Mr. Z's shares, not RBI.