Depository services in India have come a long way. The article provides a thorough and comprehensive understanding of depository services in India.

Along with the changing times, many new inventions, innovations and improvements emerge overcoming the drawbacks of the existing systems. Similar is the advent of the new, technically advanced system of depositories in our country, which appears to be a panacea for all problems associated with the traditional system of paper-based trading.

The expansion and the growth of capital market in the post-liberalization era has rendered the system of settlement through physical transfer of securities ineffective. This system required a lot of paper handling and caused numerous other problems like loss, theft, forgery of share certificates, delay in transfer, and longer settlement period. The high costs and inefficiencies associated with paper-based trading led to the emergence of an internationally competitive modern system of scrip-less or electronic trading through depositories.

The passing of the Depository Act, 1996 paved way for the establishment of depositories for the purpose of electronic trading. It introduced `Depository' as the main organization where the securities of the investor are held in an electronic form and from where the securities transaction is carried out by book entry. It interacts with its clients through a `Depository Participant' (DP) with whom the client is required to maintain a demat account. The main objective of depository is to provide maintenance or transfer of ownership records of securities in an electronic book entry form resulting in scrip-less trading rather than paper-based trading and to ensure free transferability of securities with speed, accuracy and security.

Portfolio Organizer Magazine, Depository Services, Traditional Systems, Capital Markets, Post-Liberalization Era, Electronic Trading, National Securities Depository Limited, NSDL, Government Securities, Central Depositories Services, Bombay Stock Exchange, BSE, Housing Development Financial Corporation, HDFC, Rematerialization.