Question

explain the role pre and post era of depository system in India​

Answer 1

Answer:

Explanation:

* In the twenty-first century, many aspects of technology have become a blessing. One such blessing is the ‘depository’ system which is the electronic mode of holding securities. There was a time when Companies used to issue share certificates in physical form. The investors were supposed to keep the certificate safe and forward it to the buyer once the share is sold. Now, with the introduction of Depositories Act 1996, there is no paperwork involved and in this procedure, all the entries are done electronically. The introduction of depositories system also gave rise to a new type of stock trade called as ‘dematerialization’.

* What is Dematerialization?

Dematerialization or Demat is also called as ‘scripless trade’ or ‘scripless transfer’. It is basically the conversion of physical certificates into electronic records. Under dematerialization, physical transfer of shares is avoided and transaction only takes place through an electronic medium. This is the most significant step taken for achieving a paper-free securities market. Share transfer in dematerialized form takes place freely through the electronic book-entry system.

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Answer 2

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In the twenty-first century, many aspects of technology have become a blessing. One such blessing is the ‘depository’ system which is the electronic mode of holding securities. There was a time when Companies used to issue share certificates in physical form. The investors were supposed to keep the certificate safe and forward it to the buyer once the share is sold. Now, with the introduction of Depositories Act 1996, there is no paperwork involved and in this procedure, all the entries are done electronically. The introduction of depositories system also gave rise to a new type of stock trade called as ‘dematerialization’.