Given below are two statements:
Statement I: The Central Depository Services Limited (CDSL) is the first depository to commence operations in India.
Statement II: Depository participants are electronically connected to the depository and serve as contact points with the investors.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Statement I is incorrect but Statement II is correct.
Statement I: The Central Depository Services Limited (CDSL) is the first depository to commence operations in India. — Incorrect. NSDL is the first and largest depository in India. CDSL is the second depository to commence operations.
Statement II: Depository participants are electronically connected to the depository and serve as contact points with the investors. — Correct. Both depositories work through intermediaries electronically connected to them. These intermediaries are the investors’ contact points and are called depository participants.
NCERT (Pre-rationalised Edition): “Depository … In India, there are two depositories. National Securities Depositories Limited (NSDL) is the first and largest depository presently operational in India. It was promoted as a joint venture of the IDBI, UTI, and the National Stock Exchange. The Central Depository Services Limited (CDSL) is the second depository to commence operations and was promoted by the Bombay Stock Exchange and the Bank of India. Both these national level depositories operate through intermediaries who are electronically connected to the depository and serve as contact points with the investors and are called depository participants. …” |