The market watchdog SEBI proposed on Wednesday to raise the minimum threshold for a basic service demat account (BSDA) to Rs 10 lakh. An effort to promote inclusivity and cut down on the expense of maintaining securities in demat accounts for retail investors.
To be eligible for BSDA, a person can currently hold debt and other securities in a single demat account worth up to Rs 2 lakh. The 2 lakh limit could be increased to Rs 10 lakh.
The regulator is also examining the fees associated with account maintenance for BSDA and the services rendered via it. There are currently no fees associated with accounts that hold up to Rs 1 lakh in debt securities and Rs 50,000 in non-debt securities. This cap might be increased to Rs 4 lakh.
A fee of Rs 100 may be imposed on those possessing between Rs 4 lakh and Rs 10 lakh. "The regulator stated in a note that the BSDA facility has been reviewed with consideration for the growth of benchmark indices over the last ten years and to further enhance retail investors' participation in the securities market, including investors who hold securities in physical form."
What is a BSDA (Basic Service Demat Account)?
The introduction of BSDA in 2012 was aimed at encouraging financial inclusion. A person who has or plans to have a single demat account in which they are the only or primary holder is eligible for a BSDA. The person can only have one BSDA associated with them across all depositories.
The daily closing price or Net Asset Value (NAV) of the securities or mutual fund units, as applicable, will be used by the DPs to calculate the value of the holding. The most recent traded price may be considered in the event that such a price is not available.
Why was BSDA (Basic Service Demat Account) introduced?
SEBI has decided to broaden the scope of its initial public offerings. The market watchdog announced that all depository participants (DPs) will provide a "Basic Services Demat Account" (BSDA).
With limited services and lower costs in order to promote demat account holding, achieve greater financial inclusion, and lower the cost of maintaining securities in demat accounts for retail investors, The official report from 2012.
