How safe is keeping demat deposits with CDSL/NSDL? In traditional banking system - government at least assures us till 5 lakhs INR per account in case of any loss due to bank failure or systemic failure, is there any such assurance scheme by any regulatory body or by govt for CDSL or NSDL?

When you deposit money into bank. Bank give that money as loan to others and earn interest on it.

So there is a risk if people default loan amount. And if this default amount increase then bank unable to return money to depositor.

Now in case of NSDL/CDSL when investors hold their shares in demat. They do not give this shares or pledge to anyone.

So it is safe.

Think NSDL/CDSL as service provider to store your shares details in digital format.

Also remember that companies have details about their shareholders.

So keep statement of holdings incase something happen.

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What if NSDL/CDSL system got hacked (or any systemic failure) and demat holdings are stolen just like money stolen from bank account by digitally hacking from bank’s system?

I am sure while opening up the demat account I must have given my consent via terms & conditions that if any loss happens because of technological error in CDSL/NSDL then it will be user’s liability.

I am asking this question because I am just curious to know this side of the story, I know the chance is very slim for their failure and more importantly I don’t have any other option apart from using CDSL/NSDL so I have to keep using them.

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I just told you.

Companies also have information about shareholders.

You can download nsdl/cdsl statement whenever you demat holding change and if something happen you can get share certificate copy from respective company.

NSDL and CDSL are very safe. However, you need to do your bit. There have been so many new regulations that NSDL and CDSL to avoid fraudulent use of security by the broker (karvy instance). So you keep monitoring and reconciling your balances with NSDL and CDSL. Also they provide us with statements. I feel the only person who can do any fraud is the brokers, who without your knowledge can do things.

With new regulations and after introducing TPIN where users has to authorised shares to sell.

Brokers can’t misuse demat account.

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