Which of the following is NOT related to Depository Services?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → There is only one Depository in India called National Securities Depositories Limited (NSDL).

Option (1) It is just like a bank where securities are kept — Related to depository services (Incorrect). A bank holds money in safe custody; a depository holds securities in the same way.
Option (2) Depository participants serve as an intermediary between the investor and the Depository — Related to depository services (Incorrect). The investor does not deal with the depository directly. A depository participant (DP), such as a bank or a broker, keeps the investor’s account and acts as the link.
Option (3) It is a technology-driven electronic storage system. — Related to depository services (Incorrect). Every holding is a book entry in a computer system, which makes settlement quick and paperless.
Option (4) There is only one Depository in India called National Securities Depositories Limited (NSDL). — Not related to depository services (Correct). India has two depositories: NSDL, the first and largest, and the Central Depository Services Limited (CDSL), promoted by the Bombay Stock Exchange.

Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below.

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. …”