Background behind Basic Service Demat Account:
With an objective of achieving wider financial inclusion, encouraging holding of demat accounts, and reducing the cost of maintaining securities in demat accounts for retail individual investors, SEBI introduced the concept of Basic Service Demat Account in 2012.
What’s the present scenario?
At present, an individual can hold debt securities worth up to 2 lakhs and other than debt securities worth up to 2 lakhs in a single demat account to be eligible for BSDA.
What’s SEBI’s proposal as per the consultation paper?
Keeping in view the growth of benchmark indices in the previous decade and to further enhance the participation of retail investors in the securities market including the participation of investors holding securities in physical form, the facility for BSDA has been reviewed and it is proposed to enhance the limit for a demat account to be categorized as BSDA.
SEBI’s 3 questions in the Consultation paper:
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Whether the BSDA limit be enhanced over and above the proposed limit Of 10 Lakhs? If yes, are there any specific reasons for the same.
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Whether instead of a combined limit which shall be fungible across debt and other than debt securities as proposed, separate limits should be retained for debt securities and other than debt securities?
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Whether the annual maintenance charges (AMC) for BSDA should be reviewed Further? If yes, what should be the AMC? (i) NIL (ii) 100 (iii) 500
Link to SEBI’s consultation paper:
