Inter Depository Transfers of G-Sec, T-Bills, and Gold Bonds are now allowed

Trading Announcements
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CDSL in a circular dated January 31, 2020, announced on market inter depository transfers will henceforth be allowed for Government Securities (G-Secs), State Development Loans(SDLs), Treasury Bills (T-bills) and Sovereign Gold Bonds (SGBs).

This is really good news and this means you can now buy and sell G-Secs, T-bills, SGBs on the secondary market. Up until now, we were allowing only selling and not buying. Hopefully, over a period of time, this should increase the volumes in G-Secs, T-bills and SGBs on the exchanges.

Up until now, there were absolutely no volumes in the case of G-Secs, and T-bills and steep discounts/premiums to the current price of Gold in the case of SGBs because inter depository transfers of these securities weren’t allowed. Just to set the context, here’s why inter depository transfers were needed:

Whenever you buy shares on the secondary market, the shares are credited by the Exchange to the broker’s pool account. Every broker is required to have a pool account with NSDL and CDSL which are the 2 depositories. As a client, you’d normally have an account with either NSDL/CDSL. If you’ve opened a demat account through Zerodha, your demat account is with CDSL. Assume you buy units of SGB, these units could get credited from the Exchange either in Zerodha’s NSDL pool account/CDSL pool account. If the units get credited in the CDSL pool account, the broker can transfer these units to your CDSL account.

But, if the units get credited to the broker’s NSDL pool account, the units cannot be transferred to your CDSL demat account. This is because RBI & the depositories today, don’t allow Inter Depositary transfers (NSDL to CDSL and vice versa) in any Government security. In light of such limitation, we aren’t allowing fresh purchase from the secondary markets. If you’ve received allotment of units when the issue was open, you can redeem them by placing a sell order.
From this answer by @VenuMadhav

How to buy G-Secs, T-bills, and SGBs on Kite?

Just search for the bond you wish to buy. For example, if you want to buy 7.26 2029 bond then just search for 7.26. Similar for t-bills, just search for 91tb

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For gold bonds, just search for SGB or by the instrumebt symbol
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@Bhuvan, Does this mean I can transfer SGB from IL&FS’s NSDL account to my Zerodha’s CDSL account without going through the ‘Value Free Transfer’ mode ?

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My buy order for G-Secs (on Sep 29) was short delivered on Oct 1 and yesterday, instead of having the cash refunded or the bonds credited to demat, I got the following email :

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This thread announces that the inter-depository transfer of G-Secs has been enabled since Feb 7.
This is highly irregular. I feel like I should worry and panic.
Have raised a support ticket, not heard back yet

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Nothing to worry, checking this.

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We are facing an issue with inter-depository transfers of gsec from our pool account to the client’s demat account. We have got in touch with the depositories to have this fixed and they have assured a resolution at the earliest. Your securities are safe and will be credited to you as soon as we have a resolution on this issue from the depositories. We’re expecting this to be cleared in the next 2-3 days.

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Issue is fixed. Thanks :slight_smile:

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Sorry, I am confused now. If I buy SGB from secondary market , will it get automatically transferred to my demat account or do I need to go through any manual process as described in (https://support.zerodha.com/category/your-zerodha-account/transfer-of-shares-and-conversion-of-shares/articles/inter-depository-transfer)

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The article you linked to is regarding off-market transfer of SGB’s from one Demat account to other Demat account.

When you purchase from secondary market SGB’s will be directly delivered to your Demat account, you don’t have to do anything.

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Wow… Thank you very much for the clarification.

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Sorry to bump up old thread . I have old demat account with NSDL. The DP mentioned to me that inter depository holdings of Gsec etc cannot be transferred from NSDL to Zerodha CDSL demat account ? But this circular says the other . But I noticed that this circular is issued by CDSL . Does it mean NDSL also supports this ?

NSDL site also says “Government securities cannot be transferred from one depository to another”

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Here is the link to NSDL circular regarding Inter Depository Transfers of Government Securities (NSDL/POICY/2020/0017)

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Earlier, I too had my Demat account with HDFC Securities (NSDL) and I had SGBs too in my holdings. 2 years back, when I made up my mind to move out to Zerodha (CDSL), my ex-relationship manager discouraged me that SGB can’t be moved from NSDL to CDSL so I would not be able to close the HDFC Securities A/c, so it’s better to abandon the idea. But I went ahead and submitted the DIS slip and another form. It’s mentioned in this thread.
@nithin you should hear the funny part. At the counter of the nearest HDFC Securities branch when I submitted the forms he asked me where am I moving to. And then saw the CMR copy of Zerodha and smiled. And when the paperwork was complete and I was about to leave, he told me quietly he too has an account with Zerodha. Tells you why he smiled earlier.

One big lesson for any company is - its employees are the real stakeholders, not the share holders or investors who have only put in money. Though he was working at HDFC Securities, he had an account with Zerodha. That’s life!

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How do I Buy G Sec is it a bidding System on a particular Day during a week?

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You can check this post explaining the process.

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Can I pledge Gsec to get margin for trading?

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Yes, you can. Here’s the list of securities that you can pledge.

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Assuming i pledge G sec for Margin to trade stocks. I go in a Loss. How will the settlement of Losses be adjusted?

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You can check this support article, this has been explained in detail.

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So T bills - you can not pledge for cash component?

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You can check that pledge list you have access to.