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Growth and Transformation of India’s Depository System: A Comparative Analysis of NSDL and CDSL
Subject area: Management and Commerce · Area of research: Financial Markets
DOI: https://doi.org/10.64388/IREV9I7-1723127
Abstract
The Indian capital market has undergone significant structural and technological transformation with the development of the depository system. The establishment of the National Securities Depository Limited (NSDL) in 1996 and the Central Depository Services (India) Limited (CDSL) in 1999 marked a major shift from the traditional system of holding securities in physical form to an electronic and dematerialized system. The present study examines the growth and transformation of India's depository system through a comparative analysis of NSDL and CDSL during the period from 2020–21 to 2024–25. The study is based on secondary data obtained from the Securities and Exchange Board of India (SEBI), NSDL and CDSL annual reports and official statistical publications. The analysis considers investor accounts, securities value under custody, depository participants, service-center networks and market share. The findings indicate substantial growth in India's depository infrastructure during the study period. CDSL recorded particularly rapid growth in its investor-account base, increasing from 3.34 crore accounts in 2020–21 to approximately 15.30 crore in 2024–25. NSDL's investor accounts increased from 2.17 crore to approximately 3.95 crore during the same period. In contrast, NSDL continued to maintain a substantially higher value of securities under custody. Thus, while CDSL has emerged as the dominant depository in terms of the number of investor accounts and retail penetration, NSDL continues to occupy a dominant position in terms of the value of securities held and institutional depth. The study concludes that NSDL and CDSL have played complementary roles in the modernization, digitalization and expansion of India's capital market.
Keywords
Depository System, NSDL, CDSL, Dematerialization, Capital Market, Demat Accounts, Investor Participation, Securities Market, Digitalization.
References
[1] Bhatt, K. A., & Bhatt, K. (2012). Financial Performance Evaluation of Depositories in India: A Comparative Study of NSDL and CDSL. International Journal of Scientific and Research Publications, 2(2).
[2] Srivastava, A., & Arora, R. (2015). The Depository System in India – A Comparative Study Between NSDL & CDSL. IMS Manthan: The Journal of Innovations, 10(1). Crossref
[3] Babu, B. H., Rao, B. K. S. P., & Rao, B. S. (2016). Role of Depositories in Indian Capital Market – A Comparative Study Between NSDL and CDSL. International Journal of Scientific and Research Publications, 6(12), 135–141.
[4] Babu, B. H., Rao, B. K. S. P., & Rao, B. S. (2016). Financial Performance of Indian Depositories: A Comparative Study Between NSDL and CDSL. International Journal of Advance Research in Computer Science and Management Studies, 4(11), 65–81.
[5] Shacheendran, V. (2020). Dematerialisation of Securities in Indian Capital Market: A Paradigm Shift through Depository System. ComFin Research, 8(3). Crossref
[6] Gupta, L., Mohapatra, A. K., & Goel, T. (2021). Digitalization Progress of Depositories in India: Evidences and Outcome. Indian Journal of Research in Capital Markets, 8(1–2). Crossref
[7] Securities and Exchange Board of India (SEBI). Annual Reports and Statistical Publications. Mumbai: SEBI.
[8] Securities and Exchange Board of India (SEBI). SEBI Bulletin. Securities and Exchange Board of India.
[9] National Securities Depository Limited (NSDL). Annual Reports, various years. Mumbai: NSDL.
[10] National Securities Depository Limited (NSDL). Depository Statistics. Mumbai: NSDL.
[11] Central Depository Services (India) Limited (CDSL). Annual Reports, various years. Mumbai: CDSL.
[12] Central Depository Services (India) Limited (CDSL). Depository Statistics and Periodic Statistics. Mumbai: CDSL.
[13] Government of India. The Depositories Act, 1996. Ministry of Finance.
How to cite this paper
@article{1723127,
author = {Dr. Farhana Anjum},
title = {Growth and Transformation of India’s Depository System: A Comparative Analysis of NSDL and CDSL},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {7},
pages = {3044-3049},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1723127.pdf},
abstract = {The Indian capital market has undergone significant structural and technological transformation with the development of the depository system. The establishment of the National Securities Depository Limited (NSDL) in 1996 and the Central Depository Services (India) Limited (CDSL) in 1999 marked a major shift from the traditional system of holding securities in physical form to an electronic and dematerialized system. The present study examines the growth and transformation of India's depository system through a comparative analysis of NSDL and CDSL during the period from 2020–21 to 2024–25. The study is based on secondary data obtained from the Securities and Exchange Board of India (SEBI), NSDL and CDSL annual reports and official statistical publications. The analysis considers investor accounts, securities value under custody, depository participants, service-center networks and market share. The findings indicate substantial growth in India's depository infrastructure during the study period. CDSL recorded particularly rapid growth in its investor-account base, increasing from 3.34 crore accounts in 2020–21 to approximately 15.30 crore in 2024–25. NSDL's investor accounts increased from 2.17 crore to approximately 3.95 crore during the same period. In contrast, NSDL continued to maintain a substantially higher value of securities under custody. Thus, while CDSL has emerged as the dominant depository in terms of the number of investor accounts and retail penetration, NSDL continues to occupy a dominant position in terms of the value of securities held and institutional depth. The study concludes that NSDL and CDSL have played complementary roles in the modernization, digitalization and expansion of India's capital market.},
keywords = {Depository System, NSDL, CDSL, Dematerialization, Capital Market, Demat Accounts, Investor Participation, Securities Market, Digitalization.},
month = {January},
doi = {https://doi.org/10.64388/IREV9I7-1723127}
}