Q.Study the following case/situation and express your opinion.
Mrs. Khushi wishes to open a Demat Account in her name.
Can she open the account at the Mumbai office of NSDL?
Is she required to pay for the opening of the account and its maintenance?
Does she have to send the shares to the respective company for demating?

My opinion on the three points: (1) she cannot open the account directly at NSDL — it must be opened through a Depository Participant; (2) yes, charges (mainly maintenance/transaction charges to the DP) are payable; (3) no, she does not send shares to the company — she gives them, with a DRF, to her DP.

NSDL is a depository — it holds securities in electronic form but does not deal with individual investors directly. Investors interact with the depository only through an intermediary called a Depository Participant (DP), such as a bank or a broker registered with the depository. Therefore Mrs. Khushi must approach a DP to open her demat account; she cannot open it at NSDL's Mumbai office.

On charges: opening a demat account may be free or carry a small fee, but the DP levies annual maintenance charges and transaction charges for maintaining and operating the account. So Mrs. Khushi will have to pay for its maintenance.

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