MASTER OF FINANCE AND CONTROL

BANARAS HINDU UNIVERSITY

SUMMER TRAINING REPORT

ON
PERCEPTION OF CUSTOMERS
TOWARDS SHCIL AND ITS PRODUCTS
SESSION: 2008-10

Under the Supervision of:

Prepared By:
Mr. Kartikanand Jaiswal
Jay Prashant Ekka
Branch Manager, SHCIL
MFC – 3rd Semester
Kamachha, Varanasi.
BHU, Varanasi.

ACKNOWLEDGEMENT

Working in an organization as a trainee provides a medium to

look into and experience the practices and procedures of the
corporate sector. The Stock Holding Corporation of India Ltd. gave
me a lot of exposure of the capital market. During my training
period I received unconditional help my every member of the
Stock Holding Corporation.

Firstly, I would like to express my gratitude to Prof. Shyam

Chandra (Dean, Faculty of Commerce, BHU) and to Prof B. Jha for
their efforts to place me at SHCIL, Varanasi.

I am also thankful to Mr. Manu Raj Rai (Manager, SHCIL, Varanasi)

for permitting me to work as a trainee in SHCIL. My sincere thanks
to Mr. Karthikanand Jaiswal (Branch Manager, SHCIL) for giving his
whole hearted support during my training period and providing
me with valuable information. I am equally obliged to Mr.
Rahul Singh for his guidance, cooperation and inspiration.

Finally, I would like to thank my friends, customers of SHCIL and

all the people who helped me in the successful completion of my
project.
 Jay Prashant
Ekka
MFC, 3rd
Semester
Faculty of Commerce, BHU.

PREFACE

In a professional course like MFC the significance of practical

knowledge through summer training is imperative as one gets an
opportunity to learn about a wide range of corporate activities.

Depositories in India till now have made way for the elimination of
market risk associated with physical holding in the settlement of
securities by providing a highly efficient clearing and settlement
system. Having pioneered dematerialization Stock Holding
Corporation of India ltd. is the first Depository Participant (DP)
which is registered with the National Securities Depositories Ltd.

It has been my best and sincere effort to collect information from

various sources to make this project effective. Due to shortage of
time I am unable to give a detailed report but I have tried my
level best to do justice.

In today’s competitive environment of depository services an

attempt is made to understand the trading and settlement of
securities through this project work. Any errors and omissions
that might have crept in are totally unintentional. I shall always
be grateful to all who post their valuable comments on this report.
 CONTENTS

PART 1:

Introduction to SHCIL

Dematerialization
• Meaning
• Procedure

Re-materialization
• Introduction
• Features
• Procedure
• Precaution

Depository
• Introduction
• Advantages
• Bank-Depository-An Analog
• Services provided by depository
Depository Participant (DP)
• Introduction
• Opening an Account with DP

Depository in India
• NSDL
• CDSL

PART 2:

Products of SHCIL
• Add Shares
• Equibuy
• Fund Invest
• GOI Bonds
• Insurance
• Stock Direct
• Pension Funds

Services of SHCIL
• Custodial Services
• Depository Participant Services
• DEMAT
• Pledge
• Derivatives Services
• Clearing Member
• NRI Services

SWOT Analysis
PART 3:
• Project Objective
• Research Methodology
• Analysis of Questionnaires
• Consumer View Chart in Relation to SCHIL
• Conclusion and Suggestion

Annexure

PART 1
 INTRODUCTION TO SHCIL

Stock Holding Corporation of India ltd. (SHCIL) was incorporated

at the special initiative of the government of India as a public ltd.
Company in 1986. It has been jointly promoted and owned by the
all India banks and financial institutions, viz., LIC, GIC and its
subsidiaries, ICICI bank, UTI, IDBI, IFCI and IIBI, all leaders in their
fields of business.

SHCIL began by offering custodial and post trading services

adding depository services and other services to its portfolio over
a period of time.

SHCIL has established itself in India as a one-stop solution

provider in the financial services domain.

SHCIL VALUES

• Safety and efficiency of operations is a hallmark of SHCIL.

• Professionalism and integrity.
• Customer first.
• Relationship building.
• Commitment to quality irrespective of asset size.
 WHY WOULD YOU PREFER SHCIL AS A
SERVICE PROVIDER

• Well integrated front and back office, paper and electronic

systems. A focused client relation team to manage your
needs and queries. A single point contact for your comfort.

• In-house capability to address all it needs in terms of

software development, maintenance, back-office processing,
database administration, network maintenance, backups and
disaster recovery.

• Multilevel security is maintained in software, applications

and guards to access to various data, client and internal
reports.

• Expertise in running processes using digital signatures.

• Regular audits, internal and external, by SEBI, depositories,

clients and compliance to rules and regulations.
• Constant review and benchmarking of processes to ensure
adherence to global best practices.

• Insurance cover with international re-insurance.

• Full confidentiality of business operations.

 DEMATERIALIZATION

Dematerialization is a recently introduced process by which share

certificates are converted into electronic form. If you own shares
of a company then you must have the possession of the share
certificates. Dematerialization means surrendering the physical
form of shares to a depository and receiving the shares
electronically.

A depository is like the central bank of the country and depository

participants (DPs) are like the banks with which you can open an
account so as to enable the depository to credit your account with
these shares.

According to the securities and exchange board of India (SEBI)

guidelines- banks, custodians and stock-brokers can become DPs.

An investor submits his shares to the DP who will in turn send the
shares to the company for dematerialization. This is a process by
which the company cancels the physical shares and credits your
account with an equal number of shares. If you are holding shares
for many years it is quite likely that the company may ask for a
reconfirmation of your signature as there may be some
differences in the signatures in their records and your current
signature.

Once the account is opened and shares are dematerialized buying

and selling of these shares is done through this account. The DP
gives each investor or ‘account holder’ a passbook (just like a
bank passbook) or a statement of holdings which is regularly
updated. When shares are converted into the electronic form they
will be credited to your account and if they are sold they will be
debited. At the end of every fortnight you will receive a statement
of account showing the number of shares debited and credited
into your account.
When trading is done through the electronic mode investors have
to pay fees similar to the brokerage. However the charges are
lower than the brokerage as the physical counting of shares is
absent.
While it is yet not compulsory that all the shares listed on the
stock exchanges are dematerialized the NSDL regularly
announces the companies whose shares have to be compulsorily
dematerialized. But there is a steady increase in the number of
companies trading in the dematerialized shares.

Overall, it is said that the benefits of having a dematerialized or

book-entry holding through an account are:
Modernism-electronic transactions take full account of modern IT
facilities.
Velocity of transactions-the transfer of securities by mere
accounting entries allows for a rapid and efficient disposition of
interests.
Security-risk associated with physical securities such as delay or
loss in transit, theft and mutilation are eliminated.
The concept of an ‘odd lot’ in respect of dematerialized securities
stands abolished as any amount can be a market lot. Sometimes
dematerialized securities attract lower margin and lower interest
rates compared to physical securities.

IS DEMATERIALIZATION OF SECURITIES COMPULSORY?

According to the depositories act, 1996, an investor has the

option to hold securities either in physical or electronic form.
However, SEBI has notified that settlement of trades in listed
securities should take place only in the DEMAT mode. Although,
trades up to 500 shares can be settled in physical form, physical
settlement is virtually not taking place for the apprehension of
bad delivery on account of mismatch of signatures, forgery of
signatures, fake certificates, etc.

PROCEDURE FOR DEMATERIALIZATION

• Open a DEMAT account with DP.

• Fill the DEMAT requisition form (DRF) and submit the same
with the physical certificate/s to the DP for dematerialization.
• DP defaces and sends the certificates to the issuer/registrar
who credits an equivalent number of securities in the DEMAT
account maintained by CDSL.
• For each ISIN, a separate DRF has to be used.

REMATERIALIZATION

Re-materialization is the process by which a client can get his

electronic holdings converted into physical certificates. The client
has to submit the re-materialization request to the DP with whom
he has an account. The DP enters the request in its system which
blocks the client’s holdings to that extent automatically. The DP
releases the request to NSDL and sends the request form to the
issuer/R&T agent.
Thereafter, the client’s blocked balances are debited.

FEATURES

• A client can rematerialize his dematerialized holdings at any

point of time.
• The re-materialization process is completed within 30 days.
 • The securities sent for re-materialization cannot be traded.

PROCEDURE FOR REMATERIALIZATION

• The client will submit a request to the DP for re-

materialization of holdings in its account.
• On receipt of the request form the DP will verify that the
form is duly filled in and issue to the client, an
acknowledgement slip, signed and stamped.
• The DP will verify the signature of the client as on the form
with the specimen available in its records.
• If the signatures are different the DP will ensure the identity
of the client.
• If the form is in order the DP will enter the request details in
its DPM (software provided by NSDL to the DP). While
entering the details if it is found that the client’s account
does not have enough balance, the DP will not entertain the
request.
• The DP will intimate the client that the request cannot be
entertained since the client does not have sufficient balance.
• If there is sufficient balance in the client’s account the DP
will enter the request in the DPM and the DPM will generate
a re-materialization request number (RRN).
• The RRN so generated is entered in the space provided for
the purpose in the re-materialization request form.
• Details recorded in the RRN should be verified by a person
other than the person who entered the data. The request is
then released to the DM by the DP.
• The DM forwards the request to the issuer/R&T agent
electronically.
• The DP will fill the authorization portion of the request form.
• The DP will then dispatch the request form to the issuer/R&T
agent.
 • While processing the request, the issuer /R&T agent may
report some objections. Depending on the nature of
objection, the issuer/R&T agent may reject the request or
process it partially, seeking rectification for the remaining
and send an objection memo to the DP.
• The issuer/R&T agent accepts the request for re-
materialization prints and dispatches the certificates to the
client and sends electronic confirmation to the DM.
• The DP must inform the client about the changes in the
client account following the acceptance of the request.

PRECAUTIONS

• The client has to mention the lot type in the re-

materialization request form.
• Securities sent for re-materialization cannot be traded.
Before initiating a re-materialization request in a security,
the client must ensure that he has sufficient free balances in
that security in his depository account.
DEPOSITORY

INTRODUCTION

A depository is a facility for holding securities which enables

securities transactions to be processed by book entry. To achieve
this purpose the depository may immobilize the securities or de-
materialize them (so that they exist only as electronic records).
India has chosen the dematerialization route. In India, a
depository is an organization which holds the beneficial owners’
securities in electronic form through a registered depository
participant (DP). A depository functions somewhat similar to a
commercial bank. To avail of the services offered by a depository
the investor has to open an account with a registered DP.
 ADVANTAGES OF DEPOSITORY SYSTEM

• Elimination of bad deliveries and all risks associated with

physical certificates such as loss, theft, mutilation, etc.
• No stamp duty.
• Immediate transfer and registration of securities.
• Faster settlement cycle.
• No risk of buying fraudulent certificates.
• No courier/postal charges.
• Reduced record keeping.
• One investor account for all shares.

DEPOSITORY PARTICIPANT

In India, a depository participant (DP) is described as an agent of

the depository. They are the intermediaries between the
depository and the investors. The relationship between the DPs
and the depository is governed by an agreement made between
the two under the depositories act. In a strictly legal sense, a DP
is an entity who is registered as such with SEBI under the
provisions of the SEBI act.
As per the provisions of this act, a DP can offer depository-related
services only after obtaining a certificate of registration from
SEBI.

SEBI (D&P) regulations, 1996 prescribe a minimum net worth of

Rs. 50 lakhs for stockbrokers, R&T agents and non-banking
finance companies (NBFC), for granting them a certificate of
registration to act as DPs. If a stockbroker seeks to act as a DP in
more than one depository he should comply with the net worth
criterion separately for each such depository. No minimum net
worth criterion has been prescribed for other categories of DPs.
NSDL requires a minimum net worth of Rs. 100 lakhs to be eligible
to become a DP as against Rs. 50 lakh prescribed by SEBI (D&P)
regulations.

OPENING AN ACCOUNT WITH DP

First an investor has to approach a DP and fill up an account

opening form. The account opening form must be supported by
copies of any one of the approved documents to serve as proof of
identity (POI) and proof of address (POA) as specified by SEBI.
Besides, production of PAN card in original at the time of opening
of account has been made mandatory effective from April 01,
2006.

All applicants should carry original documents for verification by

an authorized official of the depository participant, under his
signature.

Further the investor has to sign an agreement with DP in a

depository prescribed standard format which details the rights
and duties of the investor and the DP. The DP should provide the
investor with a copy of the agreement and the schedule of
charges for their future reference. The DP will open the account in
the system and give an account number, which is also called BO
ID (beneficiary owner identification number).

The DP may revise the charges by giving 30 days notice in

advance. SEBI has rationalized the cost structure for
dematerialization by removing account opening charges,
transaction charges for credit of securities, and custody charges
vide circular dated January 28, 2005.

Further, SEBI has vide circular dated November 09, 2005 advised
that with effect from January 09, 2006 that no charges shall be
levied by a depository on a DP and consequently by the DP on a
beneficiary owner (BO) when a BO transfers all the securities lying
in his account to another branch of the same DP or to another DP
of the same Depository or another depository provided the BO
account/s at transferee DP and at transferor DP are one and the
same, i.e. identical in all respects. In case the BO account at the
transferor DP is a joint account, the BO account at transferee DP
should also be a joint account in the same sequence of ownership.

BANK DEPOSITORY – AN ANALOGY

BANK DEPOSITORY

Holds funds in an account. Hold securities in an account.

Transfers funds between Transfers securities between
accounts on the instruction of accounts on the instruction of
the account holder. the account holder.
Facilitates transfer without Facilitates transfer of ownership
having to handle money. without having to handle
securities.
Facilitates safe-keeping of Facilitates safe-keeping of
money. securities.

SERVICES PROVIDED BY DEPOSITORY

• Dematerialization (known as DEMAT) – converting physical

shares into electronic form.
• Re-materialization (known as REMAT) – is reverse of DEMAT,
i.e. getting physical certificates from the electronic
securities.
• Transfer of securities – change of beneficial owner.
• Settlement of trades done on exchange connected to the
depository.
• Pledge/hypothecation of DEMAT shares, viz., loan against
shares.
• Electronic credit in public offerings of the companies.
• Non-cash corporate benefits, viz. bonus/rights – direct credit
into electronic form.
• Depository restricts the risk of fraud.

DEPOSITORIES IN INDIA

Currently there are two depositories operational in the country:

(1)National Securities Depository Limited.
(2) Central Depository Services Limited.
 NATIONAL SECURITIES DEPOSITORY LIMITED
(NSDL)

Although India had a vibrant capital market which is more than a

century old, the paper based settlement of trades caused
substantial problems like bad delivery and delayed transfer of
title till recently. The enactment of depositories act in august
1996 paved the way for establishment of NSDL, the first
depository in India. This depository promoted by institutions of
national stature responsible for economic development of the
country has since established a national infrastructure of
international standards that handles most of the securities held
and settled in dematerialized form in the Indian capital market.

Using innovative and flexible technology systems, NSDL works to

support the investors and brokers in the capital market of the
country. NSDL aims at ensuring the safety and soundness of
Indian marketplaces by developing settlement solutions that
increase efficiency, minimize risk and reduce costs. At NSDL we
play a quiet but central role in developing products and services
that will continue to nurture the growing needs of the financial
services industry.

In the depository system securities are held in depository

accounts which are more or less similar to holding funds in bank
accounts. Transfer of ownership of securities is done through
simple account transfers. This method does away with all the risks
and hassles normally associated with paperwork. Consequently
the cost of transacting in a depository environment is
considerably lower as compared to transacting in certificates.
 CENTRAL DEPOSITORY SERVICES LIMITED (CDSL)

A depository facilitates holding of securities in the electronic form

and enables securities transactions to be processed by book entry
by a depository participant (DP) who as an agent of the
depository offers depository services to investors. According to
SEBI guidelines financial institutions, banks, custodians,
stockbrokers, etc. are eligible to act as DPs. The investor who is
known as beneficial owner (BO) has to open a DEMAT account
through any DP for dematerialization of his holdings and
transferring securities.

The balances in the investors account recorded and maintained

with CDSL can be obtained through the DP. The DP is required to
provide the investor, at regular intervals, a statement of account
which gives the details of the securities holdings and transactions.
The depository system has effectively eliminated paper-based
certificates which were prone to be fake, forged, counterfeit
resulting in bad deliveries. CDSL offers an efficient and
instantaneous transfer of securities.

CDSL was promoted by Bombay stock exchange limited (BSE)

jointly with leading banks such as State Bank Of India, Bank Of
India, Bank Of Baroda, HDFC BANK, Standard Chartered Bank,
Union Bank Of India and Centurion Bank.

CDSL was set up with the objective of providing convenient,

dependable and secure depository services at affordable cost to
all market participants. Some of the important milestones of CDSL
system are:
• CDSL received the certificate of commencement of business
from SEBI in February, 1999.

• Honorable union finance minister, Shri Yashwant Sinha

flagged of the operations of CDSL on July 15, 1999.

• Settlement of trades in the DEMAT mode through BOI

shareholding limited, the clearing house of BSE, started in
July, 1999.

• All leading stock exchanges like the national stock exchange,

Calcutta stock exchange, Delhi stock exchange, Ahmedabad
stock exchange, et al have established connectivity with
CDSL.

• At the end of December, 2007, over 5000 issuers have

admitted their securities (equities, bonds, debentures,
commercial papers), units of mutual funds, certificate of
deposits, etc. into the CDSL system.
PART 2
 PRODUCTS OFFERED BY SHCIL

(A) ADD SHARES

INTRODUCTION

• SHCIL arranges loan against DEMAT shares.

• Tie-up with reputed banks which offer you the most
competitive interest rates in the market.
• You can use the shares in your free account as collateral and
take a loan from any of our empanelled banks.
• SHCIL completes your documentation and processing and
gives you a cheque within 48 hours of application.
• This is a pure value add to your depository account with us.
• Add shares are available at SHCIL centers in all the major
cities.

FEATURES

• Loan against DEMAT shares held in the DP account with

SHCIL.
• Competitive interest rates from a range of banks SHCIL has
tied up with.
 • SHCIL processes the entire paperwork required with the
bank.
• The service is available at any of over 100 branches of
SHCIL.

ADVANTAGES

• Our tie ups with banks give you a wider range of banks to
choose from. This leads to a wider range of specified and
non-specified shares to get loan against.
• The add shares team helps you with the paper formalities
precedent to a loan.
• You can now get a loan at a competitive interest rates and
margins. This is a resultant of their tie up with a wide range
of banks.
• Add shares simplify long-winded loan procedures for you and
facilitates early disbursements of funds.
• Add shares are available at any of our branches numbering
over 120.

(B) EQUIBUY

INTRODUCTION

Even after payments have been made we have to wait patiently

to see those shares reflected in the DEMAT account. With the odd
surprise of not seeing them at all which you cannot discount!

As your depository participant SHCIL assures you safe delivery of

shares every time you buy on the exchange. We have lined up a
panel of reputed brokers who process your orders on priority.
Our positions as the clearing corporations of leading stock
exchanges ensures smooth and sure credits in your account.

An initial advance and timely replenishments into the purchase

advance account take care of the payment for your purchases.

Go through the detailed EQUIBUY procedure and you will see how
EQUIBUY in a one stop shop for your share purchases.

FEATURES

• An EQUIBUY instruction from you gets the shares credited

into your account the next day of payout.
• Payment for your purchase made from a running account
called purchase advance into which you remit an initial
advance of Rs. 1000 and maintain a minimum balance of Rs.
250 at all times.
• Choose one or more brokers from a list of 77 brokers
empanelled with SHCIL. Registration with broker is not
necessary if you are already registered under any of our
other product schemes.
• Purchase on BSE or NSE.

ADVANTAGES

• Buy shares with a single instruction and get an assured

credit of shares into your account the next day of payout.
Leave the settlement procedures and broker interaction to
us.
• Affect a faster turnaround of your portfolio.
 • EQUIBUY has a very nominal charge attached to it.
• An initial advance of Rs. 1000 in the purchase advance
account and replenishments, as and when necessary, take
care of payment for your purchases.
• Choose the exchange you want to buy from- BSE or NSE.
• Choose from a range of 77 SHCIL empanelled brokers to
execute your purchases.
• EQUIBUY from the SHCIL center closest to you. Select from
120 plus SHCIL centers across the country.

PROCEDURE

• If you are not already registered with one or more of our 77

empanelled brokers under any of our other product
schemes, register yourself by filling up a broker registration
form.
• Fill up a remittance slip to open the purchase advance
account by making an initial advance of Rs. 1000.
• Approach any SHCIL branch and submit a purchase request
slip.
• Your request will be good till the end of the day. If the shares
are not purchased before the end of the day your request
lapses and a fresh request can be submitted the next day.
• Your purchase request is transmitted to the broker as soon
as you place request.
• The broker executes the trade and confirms trade details to
SHCIL. The payment for the shares purchased along with the
service charge is made from the purchase advance account.
• The shares get credited into your account the next day of
payout.
TARIFF

On Delivery Basis

• 0.65% on the value of transaction on delivery basis with a

minimum of Rs. 65 per client per broker settlement.

(C) FUND INVEST

INTRODUCTION

Fund invest is a basket of financial products ranging from fixed

income securities like fixed deposits, infrastructure bonds and
capital gain bonds to variable income securities like initial public
offers (IPOs) of equities and mutual funds. It is an attempt to offer
financial products that that cater to the various investment needs
of our esteemed clients. An effort to guide the investor to a
product portfolio that best suits his risk-return profile. Applications
for investments can be sourced from any of the SHCIL offices.
Apart from guiding our investors to pick up the right combination
of investment instruments we help them in ‘after-sales’ service by
acting as an interlocutor between the investor and the issuer of
the securities. SHCIL is an AMFI registered mutual fund advisor
(ARMFA).

FEATURES
At present, SHCIL is distributing schemes of 28 different mutual
funds. All these funds offer a wide variety of investment option
depending on the risk appetite of the investor. Some of the major
categories are:

Debt funds: The debt funds have the mandate of investing

primarily in debt papers.
Equity funds: The equity funds have the mandate of investing
primarily in equities.
Balanced funds: The balanced funds have the mandate of
investing both in equities as well as debt papers.
Capital gain bonds come under 54EC capital gains bonds, where
the investors get exemption from capital gain tax. These are ‘on-
tap’ issues. At present, SHCIL is distributing capital gain bonds of
rural electrification corporation, national housing bank, small
industries development bank of India and national highway
authority of India. Infrastructures bonds are issued by ICICI bank
and IDBI, with section 88 as the main feature.
Private placements: debt papers issued for private placement
with structural obligations by the state and central government
typically targeted for trusts and provident funds are distributed by
stock holding.
Fixed deposits: fixed deposits with high investment rating and
issued by blue-chip corporate are distributed by us. These papers
generally offer 50 to 100 basis points more than bank fixed
deposits of comparable period. At present, we are distributing
IDBI SUVIDHA fixed deposits and HDFC fixed deposits.
Initial Public Offer: IPOs offered by blue-chip corporate can be
subscribed from stock holding. Issues recently distributed by us
are Canara Bank, Allahabad Bank, Bharti Tele and I-Flex.

(D) GOI BONDS

INTRODUCTION

Savings bonds are issued by RBI on behalf of government of India

in the following series:
8.0% taxable bonds: These bonds are held in electronic form in an
account called bond ledger account (BLA). Bond ledger accounts
can be opened and operated with RBI designated receiving
offices. SHCIL has been designated as one of the receiving offices
by RBI for this purpose. Subscriptions for savings bonds can be
submitted at any of our branches.
Savings bonds being sovereign in nature are absolutely safe and
an attractive investment option in the current volatile market
situation.

The following categories can subscribe to savings bonds:

Category of investor
8.0% (taxable)
Individual

• His or her individual capacity.

• Individual capacity on joint basis.
• Individual capacity on anyone or survivor basis.
• On basis of a minor as father/mother/legal guardian.
HUF (Hindu Undivided Family)
Charitable Institution

•Charitable institution to mean a company

registered under section 25 of the Indian
companies act, 1956.
• An institution which has obtained a
certificate of registration as a charitable
institution in accordance with a law in force.
• Any institution which has obtained a certificate
from income tax authority for the purpose of
section 80G of the income tax act, 1961.
University

• University means a university established or

incorporated by a central, state or provincial
Act and includes an institution declared under
Section 3 of the University Grants Commission
Act, 1956 to be a university for the purposes of
the act.

FEATURES

The salient features of the bonds are listed below:

Feature 8.0% (taxable)

Investment limit Minimum investment is Rs.

1000 and there is no maximum
 limit.

Interest option

Payable half yearly on 1st Feb.,

1st Aug or cumulative on
maturity.
Tax benefits

Interest is taxable under IT Act,

1961. Exempt from wealth tax
under Wealth Tax Act, 1957.

Transferability
Non- transferable, non tradable
and cannot be used as
collateral for borrowings.

Nomination Available. Only sole holder or

the surviving holder can
nominate.
Repayment Repayable on expiry of 6 years
from date of issue. No interest
would accrue after maturity.

Not available.
Premature encashment

ADVANTAGES
 • Hassle free maintenance: the GOI bonds held in electronic
form in an account called bond ledger account. This ensures
smooth investing minus paperwork.
• Electronic clearing services: you can avail of electronic
clearing system (ECS) services. This ensures automatic
credit of benefits and redemptions when they accrue.
• Easy access: you can apply for subscriptions into these
bonds in any SHCIL center across the country.
• Dispatch: certificate of holdings are dispatched to the client
through courier on realization of subscription.

PROCEDURE

Subscription is a very simple process. Obtain the application form

from any of SHCIL notified centers across India. SHCIL officials will
assist you in filling up of your application form. Fill up all the
relevant columns provided in the application form. E.g. for ECS
facility, a proof of the ECS account like cancelled Cheque/bankers
certification authenticating the account number and MICR details.
Attach a Cheque /draft/pay order in accordance with the series of
subscription you want to make for the requisite amount in favor
of:
‘Stock holding corporation of India ltd. a/c GOI 8.0% savings
(taxable) bonds,
A certificate of holding will be issued specifying the investment(s)
made under the bond ledger account. The date of investment will
be the date of realization of the instrument(s).

CHECKLIST

Kindly attach the following documents as per the checklist below:

• Document
8.0% (taxable)
• ECS mandate documents

• Power of attorney documents (if appointed)

• HUF declaration (for HUF investors only)

• Certificate of identity – for address change and nominee

claims
• Minor – birth certificate, legal or natural guardian

certificate
• Form 60 or PAN for investments above Rs. 50000.

• Charitable institutions- TDS exemption certificate from IT

department, board resolutions, trust deed

• Form 15H (individuals claiming exemption of TDS)

• Universities – incorporation certificate under section 3 of

the
 University Grants Commission Act, 1956.

(E) INSURANCE

INTRODUCTION

SHCIL, a company promoted by insurance majors and financial

institutions, is a corporate agent of LIC for life insurance products
and NIA for general insurance products. SHCIL has a dedicated
team of IRDA certified insurance advisors to provide all services
relating to insurance. We also provide free professional advice to
clients on need base insurance. SHCIL has 100 odd branches all
over India to take care of all your insurance related queries and
needs.

FEATURES

• An insurance policy compensates you against the financial

impact that can arise following loss, damage of destruction
of your property (such as home or vehicle) or your health or
life.

• A fundamental principle of insurance is to put you in the

same financial position after a loss or accident that you
enjoyed before the loss. This is relatively easy with repair or
replacement of (say) a car, but is much more difficult with
the loss of life. The insurance policy is a contract and like
any contract contains clauses and conditions. Claims are
settled in accordance with the conditions detailed in the
policy.
 • SHCIL distributes life insurance policies of LIC and non-life
insurance policies of NIA.

• The service is available at any of over 100 branches of

SHCIL.

LIC PRODUCTS
Key Man KEY MAN INSURANCE

Children Insurance Policy Komal Jeewan plan 159

Jeewan Kishore plan 102
Jeewan Chayya plan 103

Endowment Policy Endowment with Profits plan 14

Limited Payment Endowment
with Profits plan 48
Jeewan Mitra plan 133
Jeewan Anand plan 149
Joint Life (Jeewan Saathi)
Policy plan 89

Retirement plan Retirement plan

NIA PRODUCTS
MEDICLAIM POLICY
FIRE INSURANCE
PRIVATE CAR INSURANCE
HOUSEHOLDER’S POLICY
MEDICLAIM POLICY

The insurance policy can be used to protect the insured party

against expenses incurred for hospitalization for
illness/injury/diseases as well as domiciliary hospitalization.
Suitable for:
• Each and every person aged between 5 and 75 years of age.
Children aged between 3 months and 5 years have to be
insured along with their parents.
• Government or private institutions for their employees.
• Clubs or associations for their bonafide members.
For more details contact: insurance@stockholding .com

FIRE INSURANCE

This policy offers protection against loss or damage of

property/materials caused by fire. The insurance should be taken
for a maximum amount of its current value after considering
factors of wear and tear as well as depreciation.
Suitable for:
This policy is suitable for every individual or corporate body with

Insurable interest signifies the right to insure. The person or

corporate body must be legally competent to enter into a fire
insurance contract.

PRIVATE CAR INSURANCE

Risks covered
This insurance policy protects the motor vehicle from loss or
damage:

• By fire, lightening, self-ignition, explosion, burglary, house

breaking or theft.
• Riot or strike.
• Flood, earthquake, cyclone or inundation.
• Transit by road, air, elevators or lifts.
 • Liability for third party’s injury or death, third party property
and towards the paid driver too.
• Drunken driving.

HOUSEHOLDER’S POLICY

The householder’s insurance policy comprises of ten sections

covering the insured’s building, fixtures and fittings, contents,
jewelry and valuables, television sets and VCR’S, bicycles,
accompanied baggage as well as personal accident and public
liability benefits. Of these ten, the insured party must opt for at
least three sections and section 2 is compulsory.
If the insured party opts for cover for more than 4 sections
excluding compulsory sections, a discount of 15 % is on the non
tariff sections. For more than 6 sections, excluding sections 1 and
2, 20 % discount is offered on non tariff sections.

(F) STOCK DIRECT

INTRODUCTION

Stock direct has changed the way you look at trading in

securities. From your desktop you can now send instructions for
buying/selling shares. A three way hands shake between leading
brokers, national and international banks and SHCIL is the crux of
stock direct.
Stock direct – India’s first online trading platform was launched in
1999. Today stock direct is the most secure online trading
platform which combines encryption technology/digital signature
features. A few clicks will seamlessly check your funds and
security positions, route the order to the broker of your choice
and do the necessary fund and share movements for you.
FEATURES

• A single instruction enables you to combine your trading,

fund and shares transfer with SHCIL taking care of the
settlement.
• Trade from home on the internet with floppy containing
stock direct software.
• Security measures based on encryption and digital signature
technology make your online deals 100% secure.
• Open a purchase advance account with SHCIL to facilitate
your fund transfers.
• Choose the exchange to trade from BSE and NSE.

ADVANTAGES

One Stop Shop

Give a single instruction towards funds confirmation for buy
orders, order routing to your broker and fund and share
movements for settlement purpose.

Convenience
Trade at home through net.

Security
Digital signature technology based on 128 bit encryption makes
your transactions 100% secure.

Cost effective
No minimum value of transaction.

Choice of Stock Exchanges

Buy/sell shares on BSE/NSE
PROCEDURE

• If you already have a DEMAT account with us, fill up a

conversion form to convert your DEMAT account to stock
direct. If you do not have a DEMAT account, fill up a DEMAT
account opening form and submit it at any of our branches.
• Register with any of our empanelled brokers by filling up the
broker registration form and submit it along with the account
opening/conversion form.
• Open account with SHCIL, a running account called the
purchase advance by remitting an initial advance of Rs.
1000 by way of Cheque /DD.

TARIFF

Brokerage
0.50% with a minimum of Rs.50 per client per broker per
settlement*.
Normal ISA charges applicable as per client’s tariff scheme.
Service tax applicable as per GOI notifications.
Media charges (one time): Rs.100 + Service tax.

(G) PENSION FUNDS

INTRODUCTION

SHCIL offers pension fund administration services to pension fund

trusts. The pension fund scheme administered by the trust could
be a defined benefit or a defined contribution scheme. For both
the scheme types, SHCIL offers the entire range of services that
include design, development and maintenance of a customized
pension.

FEATURES

Services Offered to a Defined Contribution Scheme

• Coordination with all client locations/branches for receipt of

monthly contribution data of members.
• Pension contribution account maintained at individual
member level.
• Reconciling contributions with remittance amounts.
• Settling members claim on separation.
• Liaoning with insurer for purchase of annuity.
• Handling disbursements to members on commutation.
• Distribution of earnings to eligible members, annually.
• Providing account statement to members annually.
• Maintain books of accounts of the trust.
• Handling audit and filing tax returns.

• Services offered to a defined benefit scheme

• Service records of members maintained in electronic form.
• System generated pension orders, uniquely referenced and
supported by necessary documents.
• Tracking pension orders during the period of survival of
member.
• Updating of software to incorporate changes taking from
time to time in pension rules and regulations.

ADVANTAGES
• Customized pension fund administration software to meet
the unique features of the pension scheme.
• Records of members maintained in electronic form to enable
quick access and retrieval of data.
• System generated pension orders, uniquely referenced with
necessary supporting documents.
• Employees benefit from timely release of pension orders.
• Substantial saving in cost achievable through outsourcing.

• Benefit from SHCIL’s vast and rich experience in providing

back office services to the financial services industry as a
whole and in the area of pension administration in a
particular.
• Application of latest IT technology to smoothen operations
and achieve speedier settlement.
• Benefit from the wide network of SHCIL offices across the
country.
 SERVICES OFFERED BY SHCIL

(1) CUSTODIAL SERVICES

INTRODUCTION

SHCIL provides first-rate custodial services to India’s leading

Financial Institutions, Insurance Companies, Mutual Funds,
Foreign Institutional Investors (FII’s), Banks, Indian and Foreign
Venture Capital Companies, Funds, PF Trusts & Corporate.
SHCIL,s core competence in custodial business spans 18 years,
with a dedicated pool of trained and experienced professionals
working literally round the clock using state-of-the-art computer
systems and world class technology. SHCIL maintains dedicated
communication channels, well connected to client institutions,
stock exchanges, clearing houses and depositories, thus
maintaining process and quality leadership.
As a custodian entrusted with sizable assets, SHCIL is
continuously leveraging its scale and capabilities to help its
clients mitigate risk and optimize efficiencies with greater control.

CLEARING AND SETTLEMENT SERVICES

POST TRADING SERVICES

SHCIL has specially trained personnel handling thousands of trade

instructions involving large values on sophisticated systems using
digital signature on STP (straight through processing) systems,
ensuring smooth trade confirmations to stock exchanges. SHCIL
provides the choice of multiple STP service provides enabling
competitive advantage of efficient settlements. SHCIL seamlessly
monitors trades and ensures failed trade management with
reporting and resolution of mismatches, etc. At SHCIL, a client has
the flexibility of settlement of funds through a wide panel of
banks having RTGS facility.

SETTLEMENT SERVICES

Most of the institutional trades are settled through the clearing

house of the stock exchanges. As a custodian, SHCIL facilitates
timely settlement of funds and securities. Funds are collected
/deposited from/to client and settled with the clearing houses.

Most of the institutional trades are settled in the depository mode.

For the institutional segment alone, SHCIL has a unique clearing
code on the two principal stock exchanges and separate DPM
units on both NSDL and CDSL. This ensures smooth settlement of
transactions on both exchanges/depositories, based on the
deliverables and receivables received by them for each
settlement. Daily verification of settlements (auction/normal)
facilitates smooth reconciliation of settlements of client’s trades
and mitigates systemic risk.
For debt market deals SHCIL ensures timely movement of
securities and funds.
For the occasional delivery and receipt of securities in the
physical mode, SHCIL ensures prompt scrutiny, processing and
lodgment of securities with the respective company/ registrar and
transfer agent, with the objective of final transfer to the
purchaser, with objections handling if needed. SHCIL also ensures
that delivery of physical securities to exchanges is handled
strictly as per exchange regulations.

PHYSICAL CUSTODY (VAULT) SERVICES

SHCIL has extensive vault capacity with state-of-the-art
technology. This includes tracking with bar-coding techniques.
Certificates are held in customized, fire resistant ‘modular sliding
storage units’, with automated location tracking and logs with
tight security.
There are comprehensive document tracking and storage systems
in place to hold investments in physical and electronic form.
SHCIL tracks each and every security in the custody with absolute
ease and tracks the status of investments at any point of time.
Other security features include circuit TV, smoke detectors and
fire extinguishers which are installed in the premises. SHCIL relies
on audit trials and physical reconciliation continuously to
reconfirm validity of systemic data. SHCIL also periodically seeks
reconfirmations from internal and statutory audit firms for
adherence to the established best practices.

INSTITUTIONAL DP SERVICES

SHCIL has installed dedicated DPMs (depository participant

modules) on both the depositories, viz. NSDL and CDSL.
A dedicated institutional DP team at SHCIL addresses your need
for all core DP services like account opening and maintenance,
conversion of physical holdings into electronic form, settlement of
trade instructions, re-materialization, repurchase and pledge
instructions, providing of holding and transaction statements and
daily reconciliation of clients holdings.
SHCIL also provides special services like electronic credit and
corporate action follow up, reporting of saleable holding positions
required by many fund managers, monitoring of CP redemptions,
prepayments and providing customized reports like put/call
forecasts, logical holdings and non equity holding reports.

ASSET SERVICING
SHCIL has dedicated teams to handle the various aspects of asset
servicing. The corporate actions team ensures forecast of all
corporate actions and benefits accruing on a client’s holding,
timely collection of monetary and non monetary benefits and
cover all activities relating to a corporate event like calculation of
entitlements, reconciling with companies/registrars prior to due
date, collection of monetary corporate actions from the premises
of company/registrar and transfer of same to clients. In case of
any shortage, active follow-up with each company. Customized
reporting to clients on the status of corporate actions is done
periodically.
The primary markets team takes care of applications on behalf of
clients for primary market issues, calculates the entitlements,
follows up for allotment or refunds and sends customized reports
to clients.
The dedicated redemptions team tracks the payouts of various
debt instruments held by SHCIL’s clients and monitors put/call
options. This team ensures timely monetary collection and
deposits and keeps track of the outstanding amounts and
reinvestments.
At the heart is the support provided by a highly specialized
‘Databank’ team, which is unique to SHCIL. This team tracks over
8500 companies, over 12000 issued securities, 2500 registrars
besides all relevant information available in all leading stock
exchanges and depositories. The team ensures prompt
availability of information on all corporate announcements, ISIN
listings, etc. to the custodial teams and the information solely is
for the benefit of SHCIL’s clients.
Thus SHCIL is equipped to handle all types of instruments, listed
on the BSE and NSE, money market instruments like CPs and CDs,
all kind of debt instruments and unlisted securities.

CLIENT RELATIONSHIP MANAGEMENT

Every institutional client is assigned to an experienced client
relationship manager who assists in resolving special issues
relating to the client.
Over and above the services offered we have a premium offering
called ADVAIT, an integrated, web based, online reporting system
which provides a single window access to institutional reports
with enhanced security features.

(2) DEPOSITORY PARTICIPANT SERVICES

INTRODUCTION

Our depository participant services address your individual

investment needs. With a parentage of leading financial
institutions and insurance majors and a proven track record in the
custodian business, we have reiterated our past success by
establishing ourselves as the first ever and largest depository
participant in India.
Form a tentative foray in 1998 into the individual investor arena
to servicing around seven lakhs accounts, we have endeavored to
constantly add and innovate to make business a pleasure for you.
Our networked branches ensure we are available where you look
out for us. Fourteen depository participant machines (DPMs)
connected to NSDL and seven connected to CDSL ensure fast and
direct processing of your instructions.
Our customer-centric account schemes have been designed
keeping in mind the investment psyche of our clients. Your DP
account with us takes care of your depository needs like
dematerialization, re-materialization and pledging of shares.
Matching of your scanned signature on every debit instruction
with a digitally scanned original in our system makes all your
trading transactions absolutely secure. A proactive backup of tour
instructions prior to execution in the depository makes us
oblivious to system crashes.
At SHCIL we place a very high premium on client reporting.
Periodic statements sent to you keep you informed of your
current account status. Dedicated customer care lines manned by
trained staff answer your queries on DEMAT/trades/holdings. The
latest in client response at SHCIL is Interactive Voice Response
(IVR) system for round the system for round the clock information
on your account. Registration on our website, SHCIL interactive,
enables you to check your account – related information, stock
market reports and statistics, corporate benefits declared by
companies, real-time quotes of scrips on BSE and NSE and so
much more online.

OPEN ACCOUNT

Before you open your account….

• You can collect your account opening form from any of our
branches or download it from our site itself.
• As prescribed by depository bye-laws, accounts have to be
opened in the exact order in which the names(s) appear on
the share certificate.
• Remember that holding pattern AB is not the same as BA.
However, minor differences like abbreviations, spelling
mistakes can be ignored provided signatures recorded with
the registrar/company are the same.

GET YOUR ACCOUNT OPENING FORM DETAILS RIGHT

Check your form against these details:

• All columns are filled in. write NA wherever not applicable.
• Bank account number with complete address and 9 digits
MICR numbers are filled correctly. This will facilitate effective
disbursement of monetary corporate actions into your
account.
• Signature of account holders are always in black.
 • If you would like to receive credit of shares purchased
directly into your account, mark standing instruction as ‘yes’.

YOUR ACCOUNT IS OPENED

Once your account is opened, you will be allotted a client identity

number. You will be sent an operating kit containing:
• Details of your account as recorded by SHCIL.
• Copy of the agreement entered into with SHCIL.
• ‘Delivery instruction by client’ booklet allotted to your
DEMAT account. This booklet helps you transfer shares from
your account to broker account and other accounts.
• Now you are ready to operate your DP account.

IMPORTANT POINTS

• PAN mandatory.
• SMS alerts for debits and failed trades provided by NSDL.
CDSL is providing only for debits. Hence clients may get their
mobile number and SMS flag updated.
• As per the latest NSDL guidelines, client may give local
address or correspondence address, depending on his
preference to receive the communications from the
companies.
• Complete address of the bank branch, bank account number,
account type and 9 digit MICR number is mandatory. Please
provide the specimen copy of a Cheque for noting the
correct 9 digit MICR code.
• At the time of account opening, clients are requested to
provide the proofs for identification and address. The list
may be provided.
• Thumb impressions should be attested by a magistrate or a
notary public or a special executive magistrate.
 • NSDL does not have the facility to operate a beneficiary
account on ‘either or survivor’ basis.
• The power of attorney should either contain a clause which
gives power to sell or to deal with securities generally or a
clause which gives power to operate depository account.
NSDL has provided a sample clause in its circular number:
NSDL/PI/2000/982 dated June 23, 2000. The sample clause is
as follows:

“To sell or otherwise deal with or dispose-off and to purchase,

subscribe or otherwise acquire in any manner from the market or
under public or rights issue or otherwise and accept the transfers
of any stock, funds, shares, debentures, government and other
promissory notes, securities, bonds, annuities or other mercantile
negotiable instruments which shall or may at any time belong to
me or which hereafter be transferred to me, whether solely or
jointly and whether in my own right or having any other interest
of whatsoever nature and however arising and in any capacity
whatsoever including those belonging to others with my name
and for such purposes to sign, execute or endorse all instruments
of transfer and other documents for any purpose whatsoever by
virtue of these present”.

NOMINATION FOR DP ACCOUNTS – INDIVIDUAL(S)

BENEFICIARY ACCOUNTS

• As per the instructions received from the depositories, we

can take cognizance of nomination only if it is submitted in
the prescribed format and the same ahs to be registered
with the depository participant (DP) under a ‘nomination
registration number’ (NRN). In the absence of NRN, DP will
 not be able to transmit the securities in favor of the nominee
only if it is registered and after duly submitting the
prescribed documents.
• If nomination has not been registered, account holders may
submit the nomination form in the prescribed format to the
nearest SHCIL center. On registration of the nomination, the
NRN will be communicated to the account holder(s). In case
nomination is not registered, securities can be transmitted to
legal documents as per depository guidelines.

MAINTENANCE

Change in Permanent/Correspondence Address

• A request letter (format available on the site) signed by all

the holders are required along with this photocopy of proof
of identification and proof of new address is required. Please
bring the originals with you for verification purpose. Client or
the authorized bearer can visit our branch for the same.
Copy of the last transaction statement received from SHCIL
is also required.
•
Change in Signature

• Request letter (format available) signed by the client. The

new signature to be attested by the bank. The request may
be submitted along with the copy of POI and the photocopy
of the latest transaction statement received from SHCIL.

Addition of PAN/MAPIN

• Request letter by the client giving the PAN/MAPIN number.

Account with Power Of Attorney

• These accounts can be operated by both the client and the

POA holder. In case the client has given the POA in favor of
two or more persons, then the mode of operation of the POA
holders is also to be mentioned. In case the power of
attorney is to be revoked, a letter signed by the client is
required.

Change of Telephone Number

• Request letter signed by all the holders, with a photocopy of

the recent telephone bill and proof of identification of one of
the holder.

Instructions by Fax

• Clients may avail this facility by faxing their delivery

instructions to SHCIL, by executing the fax indemnity. The
format of the indemnity is as follows:

Change in Standing Instruction

• For recording any change in the standing instruction (for

receiving direct credits) in the DEMAT account, we require a
letter signed by all the holders.

Change in Power Of Attorney Details

• If you have given POA details and you wish to operate the
account yourself, the POA has to be revoked by you in
writing.
 DEATH OF BENEFICIARY ACCOUNT HOLDER(S) –
TRANSMISSION OF ACCOUNT

Transmission of account takes place in the event of the death of

the beneficiary account holder(s). There can be three situations in
transmission of account. See which category you fit into and
follow the relevant procedure:
(1)When the account has joint holders and one dies.
(2)When the account has a sole holder with a nominee.
(3)When the account has a sole holder without a nominee.
If the shares are transmitted to beneficiary account of surviving
holders and this beneficiary account is in a DP other than
SHCIL.
• Classify the transmission case into the above categories.
• Over and above the documents explained above, the client
master list from the target DP has to be submitted.
Freezing Of Account

An account is frozen /suspended:

• Only on your instruction.
• By competent authority, i.e., by the depository/SEBI.
• On receipt of court order.
De-freezing Of Account

De-freezing of an account takes place:

• Only on your instruction.
• For de-freezing pledge accounts, your instruction has to be
accompanied by bank authorization.

(3) DEMAT

De-materialization is the process of conversion of shares from

physical form to the electronic mode. Our dedicated DEMAT team
enable you to convert your physical holdings/debentures/bonds/G-
SECS into electronic mode in a quick and hassle free manner.
TRANSPOSITION CUM DEMATERIALIZATION

The clients can get the securities dematerialized in the same

account if the names appearing on the certificates match with the
names in the DEMAT account but are in different order. This can
be done by submitting the certificates along with the
transposition form and the dematerialization request form (DRF).

TRANSMISSION AND DEMATERIALIZATION

In case of death of one or more of the joint folders, the surviving

holder(s) can get the name(s) of the deceased deleted from the
security certificate and get the same dematerialized. Notarized
copy of the death certificate, transmission form as per annexure
OB and the dematerialization request form (DRF) have to be
submitted by the surviving joint holder(s) along with the security
certificates.

As per SEBI, scrips can be divided as:

• Scrips Eligible For DEMAT
These scrips can be traded either in physical or electronic form.
• Scrips falling under compulsory DEMAT
These scrips can be traded only in electronic form.
• Submit DEMAT Request Form.
Once your demat account is opened with us and you have
received your client identity number, you can start
dematerializing your shares. You can submit the shares over the
counter at any of our branches. Do go through the tips given on
filling up the DRF to avoid rejection.

Your Shares Are Dematerialized

 • When the company gives you credit, these shares will reflect
under ‘free’ column. Now you can sell these shares. In case
the company is not satisfied with the details furnished, it will
reject the shares.
• If your shares have been rejected by the company, SHCIL will
forward the shares to you on receiving them from the
company.

(4) PLEDGE

You can pledge or hypothecate your dematerialized shares

against loan or credit facilities extended by a pledgee who also
has an account with a DP.

The Pledge Procedure

• Pledgor fills in a form requesting the DP to pledge the shares

and hands it over to the DP.
• If the form is complete in all respects, the DP processes the
form and generates a pledge/hypothecation instruction
number for the request.
• Securities to the extent of the instruction are debited from
free or locked-in balances and credited as pledged balances
of the Pledgor so that they cannot be used for any
transactions.
• The pledgee will submit a form to its DP to accept/reject the
pledge/hypothecation request.
• If the pledgee accepts the request by the pledgor, the
acceptance is communicated electronically to the pledgor’s
DP. Once the pledge’s DP confirms the acceptance of the
pledge, the pledgor cannot cancel the pledge/hypothecation
order. The pledgee’s DP executes the pledge/hypothecation
request as per the instructions given.
• In case the pledgee rejects the pledge request, the pledgor’s
DP is intimated electronically. Now the securities which were
earlier credited as pledged balances will be credited to
free/locked-in balances.
• Once the loan is repaid by the pledgor, the pledgor initiates
the closure of the pledge. The request for the closure is
transmitted electronically to the pledgee’s DP. The pledgee’s
acceptance/rejection of the request for the closure of pledge
is transmitted electronically to the pledgor’s DP.
• If the pledge is closed, the securities will be reflected as
fee/locked-in balances.
• In case the pledgor defaults in repaying the loan to the
pledge, the pledge instructs his DP to invoke the
pledge/hypothecation.

What You Need to Do?

IF YOU ARE A PLEDGOR IF YOU

ARE A PLEDGEE
See to it that:
The pledge/hypothecation request The form for
accepting/rejecting the
Pledge/hypothec
ation request is
complete in all respects. The form
agreement number, closure date, invoking the
pledge/hypothecation
pledgee details and details of the request is complete
in all respects.
securities. The form submitted for
 closure of pledge/hypothecation
is complete in all respects.

(5) DERIVATIVE SERVICES

SHCIL provides clearing services for derivative segment of

BSE/NSE and commodity segment of MCX / NCDEX.

(6) CLEARING MEMBER

INTRODUCTION

SHCIL’s long standing association with clearing members has

enabled it to develop services based on an understanding of their
working and their requirement for timely and accurate
information. We accept deposits of base capital and additional
base capital requirements stipulated by NSE for clearing members
trading on its capital market segment. Besides, our new products
with a broker empanelment clause ensure a mutually beneficial
tie-up. Clearing members stand to earn a steady income from our
product transactions and new add to their client base, while we
capitalize on their rapports with the market.
We currently offer depository services to more than 680 clearing
members of various exchanges connected with NSDL and CDSL.
Our customer care lines answer all your DP queries while the
Interactive Voice Response (IVR) system gives you information on
your account and other valuable data like CC calendar details,
tariff, ISIN information, etc. via telephone, fax and e-mail.
ADVANTAGES

• For institutional and retail clearing members we have

customized tariff for clearing members benefitting.
➢ Brokers having very high average trade value.
➢ Brokers with big retail clientele.

• Special tariffs for :

➢ CM principal accounts.
➢ NSCCL CM accounts.
➢ Unified settlement pool accounts on CDSL.

• SHCIL customer care help lines give timely and accurate

information to CMs. The interactive voice response (IVR)
system at SHCIL gives round the clock information on
holdings and transactions, pay-in/pay-out details, overdue
cum holding details, etc. via telephone, fax or e-mail.
• Updated transactions statements are available on the
website free of any charge whatsoever. Members have a
choice of accessing their statements date wise for the last
one month or settlement wise for the same period. Current
trading day transactions are also made available, updated to
the hour.
• Besides the transaction statements, the delivery-out report,
which is an extremely critical report for clearing members, is
also made available on the website, updated to the hour.

OPEN ACCOUNT REQUIREMENTS

In case of proprietor’s account, if authorized signatory is a person

other than the account holder; then the power of attorney is to be
submitted by the proprietor giving authority to that person.
IF YOU ARE SHIFTING ANOTHER DP TO SHCIL:

Account opening form:

• Board resolution.
• Memorandum of association.
• Authorized signatories (for corporate).
• SEBI registration certificate clearing indicating that it is for
stockbroker.
• Closure letter addressed to old DP duly stamped and
acknowledged by old DP.
• Closure letter and shifting letter has to be on the letterhead
of CM.
• Closure letter should be duly stamped and acknowledged by
old DP.
• Shifting letter addressed to NSDL stating :
CM name
Old CM name
Old CM BP ID
Old DP name
New DP name.

IF YOU ARE OPENING A FRESH POOL ACCOUNT:

Account opening form

• Board resolution.
• Memorandum of association.
• Authorized signatories (for corporate).
• SEBI registration certificate clearly indicating that it is for
stockbroker.
• Letter from stock exchange stating CC CM ID.
• In case of ISE mention on the letter:
Subject: Allotment of CC CM ID.

CUSTODIAL SERVICES FOR CM

CUSTODIAL SERVICES FOR BASE CAPITAL/ADDITIONAL
CAPITAL REQUIREMENTS

• We accept deposits of base minimum capital (base capital)

and additional base capital as stipulated by NSE for clearing
members to be able to trade on its capital market segment.
The securities being deposited shall be subject to legal and
beneficial ownership of :
• TM clearing member / spouse in case of individuals.
– Any of the partners/their spouses in case of
partnership.
– Any of the directors in case of corporate TM clearing
member.
• What qualifies as deposit?
The following securities can be deposited:
• Listed equity shares of approved companies subject to
15%.
• Margin.
• Equity shares of approved companies in DEMAT form
subject to 15 % margin (Nifty Scrips) and 25% margin (30
other scrips pertaining to junior nifty group).
• Listed units of mutual funds subject to 155 margins.
• Unlisted units of mutual funds subject to 15% margin of
the NAV of the units prevalent on the last day of the
preceding month.
• Listed PSU bonds subject to 15% margin.
• Other debt securities admitted for trading on wholesale
debt market segment of NSE subject to 15% margin.
• Listed GOI/treasury bills subject to 10% margin.
• Units under units scheme 1964 of UTI to be valued at the
lowest of the repurchase price prevalent in the preceding
12 months.
 • Deposit of fixed deposit receipts (FDRs) issued by
approved banks. In case of FDRs, the members have to
submit the following :
– Original FDR issued by any approved bank and drawn
and drawn on specified cities.
– A letter from the bank in a specified format.
– A letter from the member in a specified format.
– SHCIL charges upfront.
– National saving certificate and Kisan Vikas Patra issued
by post office.
– SGL securities
– Certificate of deposits (CDs) issued by banks/institution.
• NSE members may also pledge dematerialized shares in
favor of NSCCL for security base capital and additional base
capital requirements. The DEMAT shares pledged by a
member as additional base capital will be considered for the
purpose of gross exposure computation. In case of DEMAT
scrips, the following conditions apply :
(1)The member has to open a separate beneficiary account for
base capital and additional base capital :
– In the name of partners / their spouse in case of partnership
firms.
– In the name of corporate / directors of the company in case
of corporate clearing members.
– In the name of proprietor / spouse in case of proprietary
concerns.
(1) The securities to be pledged to be transferred to the
account. Pledge instruction along with pledge deed in a
specified format to be given to SHCIL.
(2) After pledge is created in favor of NSCCL, valuation is given
to NSCCL by SHCIL.
(3)Closure of pledge takes place at the instruction of NSCCL.
(4)Replacement / additional of securities also available.
 (7) NRI

INTRODUCTION

Over the years, SHCIL has grown to become a major player in the
capital market. With a network of offices operating across the
country with franchisees operating abroad, SHCIL provides
depository participant and other services close to 0.7 million
satisfied investors out of which over 6000 are NRI clientele.

SHCIL has a fully fledged NRI cell operating specifically to cater

needs pertaining to depository account opening and
maintenance. NRI cell coordinates with prospective NRI
customers, collects and assist in obtaining the relevant
documents and ensures the depository account is opened hassle
free.

NRI cell collects physical certificates to be sent for DEMAT and

ensure that the certificates are in order and can be sent for
dematerialization under the existing guidelines issued by the
depositories. Instruction for trade is accepted by fax on request
by NRI cell to ensure timely settlement of trades. In this case later
on the client needs to regularize by sending the original trade
delivery instruction. Any tariff and billing related query are
addressed by NRI cell.

In short NRI cell is a single point contact for any matter elating to
NRI depository operations.
OPEN ACCOUNT

Before you open your account ….

• Ascertain your NRI depository account status as per
guidelines issued by RBI from time to time.
 • In case of joint account, status of the first holder is reckoned
for all purposes.
• If a scrip is held by three holders of whom the first is a NRI
and the other two or residents, then the account falls under
the NRI category.
• Accounts have to be opened in the exact order in which the
names appear in the certificate. Holding pattern AB is not
the same as BA.

CHECK YOUR FORM AGAINST THESE DETAILS:

• All columns are filled in. write NA wherever not applicable.

• Specify status as Non Repatriable (NRO) or Repatriable
(NRE). Status cannot be changed once account is opened.
• Bank account details should be compulsorily provided along
with 9 digit MICR code.
• Ensure that the account status and the bank details are as
below :
(a) If the status is NRE, bank details can be ‘NRE’ or ‘NRO’.
(b) If the status is NRO, bank details can be ‘NRO’ only.
• Copy of RBI approval is not mandatory and the standing
instruction for automatic credits may be marked as ‘Y’
without furnishing RBI approval. However, the onus of
reporting to RBI is on the client.
• Proof of identity by way of copy of your passport and bank
account attestation is compulsory.
• Initial the agreement on the front side and sign in the order
of of holders in the backside of the agreement.
• Nomination.
(a)Nominee may be any person other than the account holders.
(b)Photograph of the nominee has to be affixed on the
nomination form.
(c)The nominee must sign across the photograph and in the
space provided below.
 (d)If the nominee is a minor, the guardian shall sign at all
places where the nominee is supposed to sign.
(e)Photograph of the guardian also has to be affixed on the
nomination form.

YOUR ACCOUNT IS OPENED...

Once your account is opened, you will be allotted a client identity

number. You will be sent an operating kit containing:
• Details of your account as provided by you and as recorded
by SHCIL.
• Copy of the agreement entered into with SHCIL.
• ‘Delivery instruction by client’ booklet allotted to your
DEMAT account. This booklet helps you transfer shares from
your account to broker account and other accounts.

SWOT ANALYSIS
 STRENGTH WEAKNESS

1. Wide coverage throughout 1. Lack of aggressive

the country. marketing.
2. Promoted by 7 financial
institutions. 2. Improper billings.
3. Largest account holders.
3. Expensive.

(Because separate account has

to be opened according to
holdings).

4. Largest custodian.
5. Catering to Indians as well
4. Less investment in
as NRIs and FIIs.
advertising.
6. One stop shop for all
financial solutions.
7. Advanced system network.
OPPURTUNITIES THREAT

1. E – Broking. 1. Promoters have become

competitors with strong
brand equity.
2. Increased cost as
perceived by customers.
2. Acquisition of smaller DPs.
3. Fluctuating market
conditions affect the
business.
3. Collaboration with banks.

4. New products.
 5. To increase business (by
opening new branches at
rural-urban areas.

STRENGTHS:

1. LARGEST DEPOSITPORY PARTICIPANT :

SHCIL is at the No. 1 position as depositor participant in all over

India. Being a premier custodian SHCIL is currently holding more
than 20 million certificates in etude as the largest custodian.
SHCIL accounts for more than 50% of institutional business in the
country.

2. BACK OFFICE SERVER :

For perfection in work SHCIL has back office server facility where
all the branches of SHCIL meet their necessary requirements
before any information takes place with the NSDL.

3. EXPERIENCE:

Stock holding is the oldest organization in custodian business all

over India and it has more than 10 years of experience in the
field. SHCIL has excellent management and technocrat’s team to
handle workloads and provides the best of services to its
customers.

4. PROMOTED BY FINANCIAL INSTITUTIONS :

SHCIL is promoted by all the major financial institutions in India,
i.e.
• Industrial development bank of India.
• Life insurance Corporation of India.
• Oriental insurance co. ltd.
• Industrial credit and Investment Corporation of India.
• New India insurance corporation ltd.
• National insurance corporation ltd.
• United India insurance co. ltd.
It has professionals on its board to look after the business and
meet its current and future requirements in the market.

NEW PRODUCTS:

SHCIL has offered some new products in the market like E-

stamping to meet the customer requirement as well as
established benchmark.

WEAKNESS:

1. SOME BRANCHES ARE NOT CONNECTED THROUGH

VSAT:

SHCIL is the largest branch network depository participant in the

custodian market but till now some few of the branches are not
yet connected through the VSAT.

2. LESS ADVERTISEMENT SPILLS :

SHCIL has less advertisement spill compared to its main

competitor like Kotak securities, HDFC, IDBI bank, and ICICI bank.
These are also producing the facilities of banking services and
other related services to the customers.
 OPPORTUNITIES:

1. LARGE RURAL/SEMI-URBAN ARES ARE STILL

UNEXPLORED :

SHCIL has a growing structure of its branch network but still our
rural and urban areas are not covered in the process whereby the
common man participates in the growth of the economy.
Therefore it has become necessary to give attention to our rural
and semi-urban sectors immediately.

2. SELL – N- CASH:

Sell- n- cash is totally a new concept of SHCIL where an investor

can present his share to knell in the market and can take
payment within 48 hours without delays.

3. MUTUAL FUND MARKETING :

Marketing and distribution of mutual fund is providing the facility

to the customer who do have the time and the expertise and who
are averse to risk.

4. SGL ACCOUNT:

SHCIL is the first corporation, which got he non –banking license

to dematerialize the government securities. This enables the
institutional investors to properly use their fund to derive the
extra return from their investment.

5. INSURANCE MARKETING :
Marketing of insurance services recently started by SHCIL is also a
great opportunity available for its growth. This field can enhance
great opportunities and can alleviate their position in the market.

THREATS

1. CHARGES ARE HIGHER :

Indian customers have less money at their disposal. Since SHCIL

is the No.1 in the custodial sector in the market and for providing
the best services, it has higher charges detrimental for small
investors.

2. TIE UP WITH EXTERNAL AGENCY :

Now day’s tie-ups, M&A are a regular phenomenon in the market

to beat the competition and create a place for itself. The merger
and tie-ups of financial corporations poses a bigger threat to
SHCIL.
PART 3
 NUMBER OF PEOPLE INVESTING IN STOCK MARKET

According to the findings 85% of people invest in the stock

market, while 15% don’t invest in the stock market or invest
elsewhere.

YES NO
85% 15%

After analyzing the data it was concluded that 85% of the people
invest in the stock market through different DPs while 15% of
them don’t invest in the stock market because they consider it
more risky or they have little idea about stock market.
 IMPORTANT FEATURES WHILE MAKING INVESTMENTS

The findings say that 58% think that return is the most important
feature while making investments; 38% think safety as important;
24% give priority to liquidity and 19% think tax benefit as
important.

SAFETY RETURN LIQUIDITY TAX BENEFIT

38% 58% 34% 19%

Return on investment is the prime motive behind investments.

Investors also expect safety. Liquidity needs of the investors
cannot be neglected as the demand for cash forms an important
objective of investment. Lastly, it was observed that tax benefit
also accounts for making various investment decisions.

MODES OF INVESTMENT

The given findings say that 59% of the people invest through
banks; 66% through equity; 7% through bonds and 61% through
mutual fund.
 BANK EQUITY BONDS MUTUAL FUND
59 66 7 61

After the analysis we can say that most of the people invest in
equity as it provides growth opportunity. Almost the same
amount is invested in mutual funds. A little less amount is
invested in bank as it provides safety to cautious investors but
little growth and only a few people invest in bonds.

DEMAT ACCOUNT WITH DIFFERENT DP

24% of people have their account with SHCIL, 12% have their
Demat account with Karvy , 9% with IDBI, 10% with ICICI and 45%
with others.

SHCIL KARVY IDBI ICICI OTHERS

24 12 9 10 45

Others include Eashika Stock Market, SPLF, Siddhi Shares, Kotak

Securities, Religare, Anand Rathi, India Bulls and Unicon
Solutions. These figures are on the basis of survey done in
Varanasi only.

AWARENESS ABOUT SHCIL AS LARGEST DP

According to the survey 35% of the people know that SHCIL is the
largest DP whereas 65% of them are unaware of the fact.

YES NO
35% 65%

SHCIL’s still lags behind in popularity in spite of the fact of being

the largest Depository Participant. This shows that it needs to
spend heavily on advertisements to compete in the market as
well as expand its business.

PRODUCTS AND SERVICES OF SHCIL

According to the findings first ranking is given to Demat, second

to mutual fund, third to broking and fourth to insurance. No one
knows about e-stamping as one of the services offered by SHCIL.
 DEMAT MUTUAL BROKING INSURANCE E-
FUND STAMPING
38% 25% 32% 5% -

After going through the data it is seen that Demat facility of SHCIL
is the most preferred by people, mutual fund at the second in
preference; then comes broking and the least preferred is
insurance.

BROKING FACILITY OF SHCIL IS BETTER THAN

COMPETITORS

Considering the data collected it was found that 41% of people

think that broking facility of SHCIL is better than its competitors
while 59% think that it’s the vice-versa.

YES NO
41% 59%
According to data collected 59% of people think that the broking
facility of SHCIL is not better than its competitors because of a
high broking rate.

MUTUAL FUND THROUGH SHCIL IS BENEFICIAL FOR

INVESTORS

Through the data collected and after analyzing the questionnaires

filled by people it was found that 56% of people think that
investment in mutual fund through SHCIL is beneficial for them
while 44% think that investment in mutual fund through SHCIL
does not make a difference.

YES NO
56% 44%

INVESTMENT IN GOI BONDS

The findings reveal that 20% of the people invest in GOI bonds
while 80% don’t invest in GOI bonds.

YES NO
20% 80%

While doing the analysis it was found out that most of the people
don’t invest in GOI bonds. This financial instrument could not gain
popularity due to the technicalities involved.

AWARENESS ABOUT SHCIL AS AN INSURANCE AGENT

The data collected reveals that 15% of people know that SHCIL is
also providing insurance facility and 85% are ignorant of the fact.

YES NO
15% 85%
After studying the data collected the conclusion is that most of
the people don’t know about SHCIL‘s insurance facility as it is
newly launched.

SERVICE RATING OF SHCIL

22% people consider services of SHCIL to be very good, 51%

consider it as good and 27% consider it as AVERAGE.

VERY GOOD GOOD AVERAGE

22% 51% 27%

Most of the people think that the services of SHCIL as good; some
perceive it as average and few as very good.

PERCEPTION OF CUSTOMERS TOWARDS SHCIL AND ITS

PRODUCTS

QUESTIONNAIRE
Name:
Occupation:
Mobile No:

Q1. What is your annual income?

1. Above 1 lakh 2. Above 2 lakh
3. Above 3 lakhs
4. Above 4 lakhs 5. No income

Q2. How would you rank the following investment options?

1. Fixed deposits 2. Mutual funds
3. Gold
4. Shares 5. Insurance
6. Debt funds
7. Others (please specify)

Q3. Are you aware about SHCIL?

1. Yes 2.No

Q4. What were the sources through which you came to know about SHCIL?
1. Newspapers & magazines 2. Friends
3. Television
4. Employees of SHCIL 5. Others

Q5. How do you perceive the SHCIL?

1. As a broker 2. As a depository participant 3. As an
investment consultant
4. As a banker 5. As a company 6. As an
investment corporation

Q6. Are you availing of any of the following services/products offered by

SHCIL?
1. Dematerialization of shares 2. Trading in
shares
3. Mutual funds 4. Insurance
5. Fixed deposits 6. Govt. of
India bonds
7. e-stamping
Q7.What is your objectives/motives while making investments?
 1. Growth 2. Tax benefits
3. Risk
4. Cost 5. Security
6. Others

Q8. What do you think are the benefits/advantages of availing the services of
SHCIL?
1. High returns 2. Low costs
3. Time saving
4. Less legalities 5. Security
6. Others

Q9. Are you satisfied with the services and products offered by SHCIL?
1. Yes 2. No

Q10. How would you rate our products in comparison to other institutions
offering similar
services on a 10 point scale?

Q11. What are the improvements you would like in the services that we
offer?
Place…………………………….
Date: ……. /……../……………

YOUR COOPERATION IS VALUABLE TO US

CUSTOMERS’ VIEW REGARDING STOCK HOLDING

FEATURES CUSTOMERS’ VIEW

Charges Very high
Services Good
Promotion Need to invest in promotional
activities
Personal touch Satisfactory
Reliability Very reliable
Speed Good
Time management Satisfactory
Awareness about SHCIL High awareness
Knowledge of its products and Known to customers who often
services visit to stock holding; others
have little knowledge.
Visits to SHCIL’s website Quite regular
Depository services Good
Billing services Unsatisfactory
Other services Good
Working environment Needs more improvement
Dealing of employees with the Good
customers
Relationship between clients Good
and SHCIL

CONCLUSION

SHCIL has been able to maintain a lead position in a highly

competitive environment which is no small achievement by any
standards. To further augment its client base and maintain the
lead SHCIL has decided to leverage on the strength to identify
new products which would enable it to achieve the desired
objectives. Being an important constituent of the capital market
the future of SHCIL is extricable intertwined with the fortunes of
the capital market in general and the stock market in particular.
SHCIL is aware of the need to utilize the existing infrastructure
and exploit its strength to the maximum.

It has already introduced several innovative products like sell-n-

cash, cash-on-payout, loans against Demat shares, fund invest,
mutual fund distribution, Equibuy, etc. the objective is to provide
the investors different investment options and financial products
all under the same roof – a one stop shop for all financial products
and services.
With the economy recovering from the recessionary pressure and
the prices stabilizing gradually SHCIL expects growth and a
brighter future.

SUGGESTIONS

(1)A the number of DPs has increased in recent years efforts

should be made to provide best services to their existing as
well as potential clients.

(2) SHCIL should adopt an intensive marketing campaign to

promote new products.

(3)The cost structure needs to be revised so as to attract

potential customers and compete in the market.

(4)SHCIL should create awareness among the public of the

products that it currently deals with in order to provide
various investment opportunities for the investing
community.
 (5)SHCIL should create more employment opportunities so as
to tap best workforce available in the market.

PROJECT OBJECTIVE

The main objectives of the project are as follows:

(1)To analyze the genesis and growth of depository in India.

(2)To evaluate the operational framework of depositories in

India and its technological developments.

(3)To analyze the management and working of SHCIL in

Varanasi.

(4)Critically examine the depository services provided by

SHCIL.
 (5)To know about the customers’ expectations from the capital
market.

RESEARCH METHODLOGY

Types of research Descriptive and

conclusive.
Data collected Primary and
secondary data.
Data collection method Questionnaires
Personal
observation
Personal
interview
Data collection, mode Closed and open
ended
Undisguised
questionnaire
Sample size 100
Data collection technique Area sampling
Data analysis techniques Quantitative and
qualitative
Data presentation Bar diagram, pie
chart, line graphs, etc.

REFERENCES

Journals and Reports:

• SHCIL Journal Report

 • Various Forms Used in the Depository Work of SHCIL

Websites:

• www.onlinestockholding.com
• www.sebiindia.com
• www.nsdl.com
• www.moneycontrol.com
• www.sharekhan.com
• www.investopedia.com

Books:

• Security Analysis and Portfolio Management – Fischer and

Jordan.
• Financial Management – R.P. Rustagi.
• Business on the Net: What’s and How’s of E-Commerce -
Agarwala, K.N. and Deeksha Ararwala.

ANNEXURE

• Form for Nomination / Cancellation of Nomination.

• Request for Address/Bank Details Change.
• Dematerialization Request Form.
• Application for Allotment of Permanent Account
Number.
• Updation of PAN Number.