A Depository is an organization where the securities of a shareholder are held in the electronic form. This is done at the request of the shareholder through the medium of a Depository Participant (DP). A depository is similar to a Bank. If an Investor wants to utilize the services offered by a depository, he/she has to open an account with the depository through a DP - this can be compared to the opening of an account with any of the branches of a bank in order to utilize the services of that bank.

A DP is your representative in the depository system and is similar to your bank branch. Your DP will maintain your securities account balances and intimate to you the status of your holdings from time to time. According to SEBI guidelines, financial institutions, banks, custodians, stock brokers etc., can become depository participants. IDBI is a registered DP with National Securities Depository Limited (NSDL). 

When you buy shares in the depository mode you will become the owner of those shares in the depository within a day of the settlement being completed. You will not have to apply to the Company for registering the shares in your name. Thus, there will be no possibility of loss or theft when the share certificates are posted to the company. You will have no fear that any fake or stolen shares may have been delivered to you. At present, it takes an investor 40 - 60 days to get the shares registered in his name.

Dematerialisation is a process by which the physical certificates of an investor are taken back by the Company / Registrar and actually destroyed and an equivalent number of securities are credited in the electronic holdings of that investor. This is done at the request of the investor. An investor will have to first open an account with a DP and then request for the dematerialisation of his certificates through the DP so that the dematerialised holdings can be credited into that account. 

Yes. If you wish to get back your securities in the physical form all you have to do is to request your DP for the Rematerialisation of the same. Rematerialisation is the term used for converting electronic holdings back into certificates. Your DP will forward your request to NSDL after verifying that you have the necessary security balances. NSDL in turn will intimate the registrar who will print the certificates and dispatch the same to you.

It does not really matter at all. The registrar will print new certificates with a new range of certificate numbers. You will usually be allotted a new folio number; however if you already have an existing folio number you may be allotted the same.

Apart from the risk arising out of having to deal with the paper work and keeping account of the share certificates, the brokers are exposed to the risk of bad deliveries in the present system.

You can approach IDBI and they will open your account.

There will be reasonable charges for the opening of accounts and also for every transaction in the accounts. The depository will publish its charges and the participants will also have to make their charges known to the market.

Just like a bank branch, the DP will give you a passbook or a statement of account. The statement of account will be dispatched to you periodically by the DP; however the statement of holdings can be sent to you as and when requested by you.

In case of any discrepancy in the statement of account, you can contact your DP. If the discrepancy cannot be resolved at the DP level you should approach NSDL for clarification.

Simple, inform your DP and obtain a duplicate account statement or depository passbook. Your statement or passbook cannot be used by anybody else for trading in your account.

There are absolutely no restrictions to the number of DPs you can open accounts with. Opening an account with a DP is very similar to opening a bank account. Just as you can have Savings or Current accounts with more that one Bank, you can open accounts with more than one DP.

No, the depository has not prescribed any minimum balance. In fact, you can even have zero balance in your account. However, the DPs are free to fix some minimum limits.

When you open an account with a DP, you sign an agreement with the DP in which the DP indemnifies you for any misuse of your holdings. The depository will also ensure that the interests of the investors are protected so your grievances, if any, against your DP will be resolved by the depository.

Yes, every transaction in your account will be authorised by you. You can authorise any transaction by affixing your signature. Your DP will advertise its facilities and you should go through them carefully. There is a facility by which you can lock your account so the DP will not be able to carry out any transactions in your absence without your authorisation. NSDL will send out holdings statements to some beneficial owners picked at random. In case the balance in your account as per your passbook does not tally with the balance as per the statement sent by NSDL, you will be credited into that account.

Definitely, in fact the public issue application form itself contains a provision for you to indicate the manner in which you want the securities to be allotted to you. All you have to do is to mention your client account number and the name of the DP and any allotment due to you will be credited into that account.

When any corporate event such as rights, bonus or dividend is announced for a particular security, the depository will give all the details of the clients having electronic holdings of that security as of record date/book closure to the registrar. The registrar will then calculate the corporate benefits due to all the shareholders. The disbursement of cash benefits such as dividend/interest will be done by the registrar whereas the distribution of securities entitlements will be done by the depository based on the information provided by the registrar.

In case of those corporate events where you can exercise your option such as rights issue or optional conversion of debentures to shares, you do have a choice of either physical or electronic.