[Enter Post Title Here]

(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.

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.

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 -materializ ation

• 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
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
•

• Custodial Services

• Depository Participant Services

• DEMAT

• Pledge
•
Derivatives Services
•
Clearing Member
•
NRI Services
SWOT Analysis
PART 3:
•
Project Objective
•
Research Methodology

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
securiti
es sent
for re-
materia
lization
cannot
be
traded.
PROC
EDU
RE
FOR
REM
ATER
IALIZ
ATIO
N
•

The
client
will
submit
a
request
to the
DP for
re-
materia
lization
of
holding
s 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
acknow
ledgem
ent
slip,
signed
and
stampe
d.
•
The DP
will
verify
the
signatu
re of
the
client
as on
the
form
with
the
specim
en
availab
le in its
records
.
•If the
signatu
res are
differe
nt 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
(softwa
re
provide
d by
NSDL
to the
DP).
While
enterin
g the
details
if it is
found
that the
client’s
account
does
not
have
enough
balance
, the
DP will
not
entertai
n the
request
.
•The
DP will
intimat
e the
client
that the
request
cannot
be
entertai
ned
since
the
client
does
not
have
sufficie
nt
balance
.
•
If there
is
sufficie
nt
balance
in the
client’s
account
the DP
will
enter
the
request
in the
DPM
and the
DPM
will
generat
e a re-
materia
lization
request
number
(RRN).
•
The
RRN
so
generat
ed is
entered
in the
space
provide
d for
the
purpos
e in the
re-
materia
lization
request
form.
•
Details
recorde
d in the
RRN
should
be
verified
by a
person
other
than
the
person
who
entered
the
data.
The
request
is then
release
d to the
DM by
the DP.
•The
DM
forwar
ds the
request
to the
issuer/
R&T
agent
electro
nically.
•
The DP
will fill
the
authori
zation
portion
of the
request
form.
•The
DP will
then
dispatc
h the
request
form to
the
issuer/
R&T
agent.
While
process
ing the
request
, the
issuer /
R&T
agent
may
report
some
objecti
ons.
Depend
ing on
the
nature
of
objecti
on, the
issuer/
R&T
agent
may
reject
the
request
or
process
it
partiall
y,
seeking
rectific
ation
for the
remaini
ng and
send an
objecti
on
memo
to the
DP.
•
The
issuer/
R&T
agent
accepts
the
request
for re-
materia
lization
prints
and
dispatc
hes the
certific
ates to
the
client
and
sends
electro
nic
confir
mation
to the
DM.
The
•

DP
must
inform
the
client
about
the
change
s in the
client
account
followi
ng the
accepta
nce of
the
request
.
PREC
AUTI
ONS
•

The
client
has to
mentio
n the
lot type
in the
re-
materia
lization
request
form.
•
Securiti
es sent
for re-
materia
lization
cannot
be
traded.
Before
initiatin
g a re-
materia
lization
request
in a
securit
y, the
client
must
ensure
that he
has
sufficie
nt free
balance
s in
that
securit
y in his
deposit
ory
account
.
DEP
OSIT
ORY
INTRO
DUCTI
ON
A
deposit
ory is a
facility
for
holding
securiti
es
which
enables
securiti
es
transact
ions to
be
process
ed by
book
entry.
To
achieve
this
purpos
e the
deposit
ory
may
immobi
lize the
securiti
es or
de-
materia
lize
them
(so that
they
exist
only as
electro
nic
records
). India
has
chosen
the
demate
rializati
on
route.
In
India, a
deposit
ory is
an
organiz
ation
which
holds
the
benefic
ial
owners
’
securiti
es in
electro
nic
form
through
a
register
ed
deposit
ory
particip
ant
(DP).
A
deposit
ory
functio
ns
somew
hat
similar
to a
comme
rcial
bank.
To
avail of
the
service
s
offered
by a
deposit
ory the
investo
r has to
open
an
account
with a
register
ed 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
.

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 OF FERED 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.
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

INTRODUCTIO
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
Dealing of employees with the
customers
Good
Relationship between clients
and SHCIL
Good
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.

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Request for Address/Bank Details Change.

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Dematerialization Request Form.

•

Application for Allotment of Permanent Account

Number.
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Updation of PAN Number.