📷 Image Credits: Moneycontrol
The Securities and Exchange Board of India (Sebi) has recently proposed a major revision to the framework for Basic Services Demat Accounts (BSDA), increasing the limit of securities that can be held in such accounts from Rs 4 lakh to Rs 10 lakh. This move comes as a step towards driving financial inclusion and encouraging wider participation of retail investors in the securities market.
The circular issued by Sebi on June 28 outlined the new guidelines for BSDA, stating that the value of securities in the demat account should not exceed Rs 10 lakhs for debt and other than debt securities combined. In order to qualify for a BSDA, individuals can only have one demat account where they are the sole or first holders, and they are allowed to have only one BSDA across all depositories.
Furthermore, the circular detailed the services rendered to BSDA account holders, including providing electronic statements free of cost and charging a fee not exceeding Rs 25 for physical statements. It also specified the maintenance charges for these accounts based on the value of securities held. Accounts with a value of up to Rs 4 lakh will have zero maintenance charges, while those with a value between Rs 4 lakh and Rs 10 lakh will incur a charge of Rs 100. Accounts holding securities valued over Rs 10 lakh will be considered regular demat accounts and subject to regular charges.
The valuation of holdings in such accounts will be determined by the depository participants based on the daily closing price or NAV of the securities or units of mutual funds. The circular also addressed the eligibility reassessment for BSDA accounts by depository participants within two months from the issue of the circular.
Sebi’s proposal to enhance the threshold for BSDA from Rs 2 lakh to Rs 10 lakh aims to make investing more accessible and affordable for retail investors, thereby promoting financial inclusion. The regulator is also considering revising the annual maintenance charges for BSDA accounts to align with the new value limits, emphasizing its commitment to facilitating ease of investment and participation in the securities market.
