FAQ ON DEMATERIALISATION OF SHARES
How do you demat your shares?
The process of opening an account with a Depository Participant is similar to the opening of a bank account. First, you will have to open an account with a Depository Participant (DP) of your choice by filling up an Account Opening Form and signing a “Participant-Client Agreement”. You will be then given a unique client ID number, which must be quoted in all correspondence with the DP.
Thereafter, you will have to fill up and submit a Dematerialisation Request Form (DRF) provided by the DP duly signed by all the holders and surrender the physical shares intended to be dematted to the DP. The DP upon receipt of the shares and the DRF, will issue you an acknowledgement and will send an electronic request to the Company/ Registrars and Transfer Agents of the Company through the Depository for confirmation of demat. The DP will simultaneously surrender the DRF and the shares to the Company / Registrars and Transfer Agents of the Company with a covering letter requesting the Company to confirm demat. The Registrars and Transfer Agents of the Company, after necessary verification of the documents received from the DP, will cancel the physical shares and confirm demat to the Depository. This confirmation will be passed on by the Depository to the DP which holds your account. After receiving this confirmation from the Depository, the DP will credit your account with the number of shares dematerialized. The DP will hold the shares in the dematerialized form thereafter on your behalf. And you will become the beneficial owner of these dematerialized shares. DO NOT SEND THE SHARE CERTIFICATES / DOCUMENTS FOR DEMATERIALISATION TO THE COMPANY OR ITS REGISTRARS AND TRANSFER AGENTS.
When you submit the shares for dematerialisation, your DP will deface the share certificates with the stamp “SURRENDERED FOR DEMATERIALISATION”. This ensures that your shares are not lost in transit or misused till credit is received by you in your demat account.
What are the charges to be paid for opening an account and to demat one's physical shares? Will there be any charges for each transaction?
Each DP can levy charges by way of account opening fees, transaction fees, custody fees and so on. The charges differ from Depository Participant to Depository Participant and therefore you will have to contact your DP for the same.
I have purchased some shares in paper form. Can I directly give the share certificates to my Depository Participant for dematting them in my favour?
Prior to dematting your shares, they have to be registered in your favour. Hence, you have to necessarily lodge the share certificates with a duly executed transfer deed with the Registrars and Transfer Agents of the Company. Once the share transfer is processed, an option letter for dematting your shares will be sent to you. You can then give us your Demat Account No. with the Demat Request form for the dematting process through your DP and the shares will be directly credited to your Demat Account.
Is it a fact that Bank of India shares are to be traded compulsorily in Demat Form? Do I have the option of holding them in physical form?
Yes. The shares of the Bank are to be compulsorily traded in demat form. However you can still buy shares in physical form upto 500 (through odd lot window facilities provided by Stock Exchanges) and send the same for transfer to the Registrars and Transfer Agents of the Company. You may indicate your desire to return the shares in physical form, while lodging the same for transfer. After the transfer is registered in your favour, the share certificates will be returned to you in physical form.
How do I get my dividends on dematted shares? Will I get the Annual Report after I demat my shares and would I be able to attend the AGM?
The Depositories will give the list of demat account holders and the number of shares held by them in electronic form on the Record date to the Registrars and Transfer Agents of the Company (known as Benpos). On the basis of Benpos, the Company will issue dividend warrants in favour of the demat account holders.
The rights of the shareholders holding shares in demat form are at par with the holders in physical form. Hence you will be eligible to get the Annual Report and will have the right to attend the AGM as a shareholder.
What are the chances of any fraud/disputes in using a demat account? Whom should I approach in such cases?
Common risk factors applicable to trading in physical shares like mismatch in signatures, loss in postal transit, etc., are absent since the dematted shares are traded scripless.
However, in the unlikely event of any other dispute, the concerned Stock Exchange and/or Depository Custodian viz. NSDL/CDSL or SEBI would have to be approached for resolving such issues.