Evolution of DEMAT

So, your stock broker has told you to open a DEMAT account. You might have thought, what on earth is a DEMAT account and why do you need it? Keep reading to find out the evolution of DEMAT accounts.

Our era belongs to the internet and all things digital, and there’s no turning back. With everything going online, it becomes easier for a consumer to access his assets and liabilities at the click of a button. In an age where change is constant, it’s safe to say that communication and learning devices are here to stay. This technology isn’t alien to India. Slowly and steadily, all monetary transactions have gone online. In fact, India plays a significant role in the international market and is deemed to be one of the fastest and strongest growing economy.

The Indian share market has always been fascinating. What used to be known primarily for its agricultural produce is now known for its evolution in digital banking. The Indian capital market is famous for its contribution to its ever-growing economy. This contribution is visible from the amount of transactions that happen in the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). In turn, this attracts potential investors to join the trading bandwagon, thus making their fair share of profits, be it long or short term.

How did it all begin?

In 1991, India began modernizing for the better. Banking and investment methods were old-school and were in a desperate need to be revamped. Then came DEMAT. In other words, a de-materializing account, which was fully automated for trading purposes. Keeping up with the tech-savvy generation, DEMAT accounts have given investors the boon of transparency, while eliminating the risks and long procedures that paperwork holds.

How do you go about it?

The progressive procedure of Dematerialization started with the stockholder opening a DEMAT account with his broker. This was, to some degree, like opening a ledger where his physical authentications would get changed into an electronic and compatible structure viable with his DEMAT account. This similarity, additionally, would not be any different from the former paperwork it came with. As far back as its development, the DEMAT record has significantly disposed of the issues of phoney reports, stolen shares, produced and forged signatures, mutilation and duplication of share certificates, and other exchange issues, which prompted different mediation cases and other financial specialist questions. This makes online share trading easier and customer friendly.

Depository Ordinance 1995 has made a fully automated module for all stock exchanges, thus making DEMAT a screen-based trading platform. In other words, investors get to skip the endless, and sometimes inaccurate, paperwork and skip right to accessing their DEMAT account at the click of a button.

This was a brief account of the evolution of DEMAT accounts.