Central Depositories Services India Ltd

Context

  • Certain services at Central Depositories Services India Ltd (CDSL) were disrupted due to a suspected cyber attack over the weekend.

What is CDSL?

  • CDSL, or Central Depositories Services India Ltd, is a government-registered share depository, alongside its other state-owned counterpart National Securities Depository Ltd (NSDL).

    Central Depositories Services India Ltd
    Source: Wikipedia
  • Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions, playing a somewhat similar role to what banks play in handling cash and fixed deposits.
  • While banks help customers keep their cash in electronic form, share depositories help consumers store shares in a dematerialised form.
  • The first listed Indian central securities depository, was founded in 1999.
  • It facilitates holding and transacting in securities in the electronic form and facilitates settlement of trades done on stock exchanges.
    • These securities include equities, debentures, bonds, Exchange traded Funds (ETFs), units of mutual funds, units of Alternate Investment Funds (AIFs), Certificates of deposit (CDs), commercial papers (CPs), Government Securities (GSecs), etc.
  • It is a Market Infrastructure Institution or MII that is deemed as a crucial part of the capital market structure, providing services to all market participants, including exchanges, clearing corporations, depository participants, issuers and investors.
  • On its website, CDSL describes its foundational goal as “convenient, dependable and secured depository services”, and says that all its activities over the last two decades have been in support of that goal, at an affordable cost.
  • It is currently the largest depository in India in terms of number of demat accounts opened.
  • It is led by its chairperson Balkrishna V Chaubal, who retired as Deputy Managing Director of State Bank of India, and its Managing Director & Chief Executive Officer Nehal Vora, a former Chief Regulatory Officer of BSE Limited.

Source: IE

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