8.06  Benefits of Dematerialization

. Benefits of Dematerialization i. The risks pertaining to physical certificates like loss, theft, forgery and damage are eliminated completely with a DEMAT account. ii. The lack of paperwork enables quicker transactions and higher efficiency in trading. iii. Trading has become more convenient as one can trade through computers at any location, without the need of visiting a broker. iv. The shares that are created through mergers and consolidation of companies are credited automatically in the DEMAT account. v. As all the transactions occur through the depository participant, a trader does not have to communicate individually with each and every company. vi There is no need for stamp duty for transfer of securities; this brings down the cost of transaction significantly. vii. Certain banks also permit holding of both equity and debt securities in a single account. viii. Banks also provide dedicated and trained customer care officers to assist through all the procedures. ix. A DEMAT account holder can buy or sell any amount of shares. However, there is limit on the number of transactions done using physical securities. x. One can also choose to take a loan against securities which are held in a DEMAT account by offering it as a collateral to the lender. BENEFITS OF DEMATERIALIZATION Low risk of Delivery Reduces Costs Easy to Hold No Odd-lot Problem Automa c Update Common Bank