Safety with Depositories.

[sh50]

Just as one tries to have insurance with LIC where the presence of the govt ensures safety(UTI baleout), in the case of depositories, isn't one safe with people like IL&FS,ICICI BANK ETC instead of parties like Sharekhan, motilaloswal, Fortis etc. Morepenlaboratories was financially most sound once upon a time but is now in tatters. These private parties too could be in the doldrums someday though they may give better service. What happens then? Problem is that ICICI and ILFS do not no much about stocks but seem safe and with the others it is vice-versa. WE all know what happened in Global trust bank. a Depositery is nothing but a bank of shares.

Any comments, traderji?

 

[niranjan190]

Just as one tries to have insurance with LIC where the presence of the govt ensures safety(UTI baleout), in the case of depositories, isn't one safe with people like IL&FS,ICICI BANK ETC instead of parties like Sharekhan, motilaloswal, Fortis etc. Morepenlaboratories was financially most sound once upon a time but is now in tatters. These private parties too could be in the doldrums someday though they may give better service. What happens then? Problem is that ICICI and ILFS do not no much about stocks but seem safe and with the others it is vice-versa. WE all know what happened in Global trust bank. a Depositery is nothing but a bank of shares.

Any comments, traderji?

Dear all,
I'm a novice to this trading area, interested to start it. I was just wondering about the safety/security of our shares with these depositiories. Is it safe to have the shares with them. Does SEBI ensures safety and security. After all its our hard earned money.
Please help me understand this.

 

[jdm]

lets clear the concept.

the cash we deposits in bank remains with the banker. so if the bank goes bankrupt so does we.

but in case of shares the access lies in the safe hand of cdsl or nsdl and not with the depository with whom we sign in. the depositories are mare custodian.

 

[Rajagopals]

Dear Friends:

Senior & experienced members may kindly guide on some aspects of dematerialisation procedure and the safety thereof, for the benefit of new entrants like me who are confused & cautioned by the miserable experiences shared by some members in this and other portals:

a) Merits & demerits of NSDL and CDSL - Which one is safer or relatively more reliable Depository?

b) How efficient is the "Freeze" / "Unfreeze" option? The shares are frozen by the Depository or by the DP? How soon does the instruction get activated?

c) "Freeze" instruction is given to Depository or DP? If DP, is the "Freeze" option provided by all the DPs?

d) Is "Freeze" option available to both normal DIS book based accounts, as well as online-trading accounts?

e) Can shareholders exercise "Freeze" option while sending the Physical shares for Dematerialisation itself?

f) Are Physical Shares safe with the DP when we handover same to them for Dematerialisation? If the DP loses/misplaces the shares, or if shares are lost in transit etc, who will be responsible & how will the Shareholder get the situation remedied?

g) If you do not sign any online trading agreement, and do not sign any Power of Attroney with your DP, are there possibilities that the DP can still misuse your Demat Account with them, ie:can they still manipulate the account and play mischief with your Shares held by them in Electronic Form?

Sorry for too many questions at a time. But they are all very relevant and important to me and your valuable responses to any or all these doubts will help me to take important decisions.

Thank you all, in advance.

RAJ