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PRESENTED BY PRARTHANA AMIN PGPM FINANCE BATCH 2011-2013

Demat operations

Demat is the abbreviation used for dematerialization. Demat operation includes: Opening demat account. Dematerialization of securities Rematerialisation Transaction in demat account Trading and settlement process Closure of account Pledging Corporate actions Freezing of accounts

Company profile

History
Started in 1972 in the co-operative field TJSB presently is catering to the needs of society through a close network of 64 Branches and 1 Extension Counters spread all over the city of Thane, Mumbai, Navi Mumbai, Nashik, Pune, Satara, Aurangabad, Kolhapur, Nagpur, Latur, Goa & Karnataka.

Organization chart of TJSB


CHAIRMAN DIRECTORS

CHIEF MANAGER

DIVISIONAL MANAGER

BRANCH MANAGER

STAFF OFFICER

Major players in DEMAT

DEPOSITORY

A depository can be defined as an institution where the investors can keep their financial assets such as equities, bonds, mutual fund units etc in the dematerialized form and transactions could be effected on it. In India, there are two depositories namely, the

National Securities Depository Limited(NSDL) promoted primarily by IDBI, the Unit Trust of India and the National Stock Exchange, and the
Central Depository services ltd promoted by the Stock Exchange, Mumbai

The Depository system to some extent works like the banking system.

DEPOSIORY PARTICIPANTS
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.

Demat services of TJSB

TJSB Bank launched Demat service on 10th August 2011 and within 10month around 720 Demat accounts has been opened. TJSB is late to start this service, but the growth of the demat market/requirement will ensure their strong presence as a full fledge DP.

Benefits of TJSB DEMAT

Desired benefits to TJSB bank: Increasing the banks CASA tremendously Attracting new customers Provide depository services to be at par with other competitors A source of additional non-interest income by way of custodial and transaction

Benefits to customer: No stamp duty on transfer of securities Elimination of risk associated with physical certificate like bad delivery, fake securities etc Reduction in paper work for transfer of securities Nomination facility available for the customer

Actual working style of TJSB


H.O Demat Section

section 1

Section 2
DPM, EDPM entries, upload/ download activity, DIS issue monitoring

Section 3

Section 4
Billing, other core value added services, marketing eservices initiative & monitoring all branches

Section 5
House Keeping and marketing activities and MIS, stock keeping

Inward, Process Check, Account Opening

Demat/ Remat and Transaction monitoring

Legal framework of demat

KYC NORMS
The objective of know your customer guidelines is to prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Know your customer procedures also enable banks to know/understand their customers and their financial dealings better which in turn help them manage their risks prudently.

ANTI MONEY LAUNDERING


Anti Money Laundering is the term used by banks and other financial institutions to describe the variety of measures they have to combat this illegal activity and to prevent criminals from using individual banks and the financial system in general as the conduit for their Proceeds of Crime.

SUSPICIOUS ACTIVITY REPORT


A Suspicious Activity Report (known as a SAR) is a key element of those mandatory arrangements in a financial institution. Suspicious Activity Reports help banks and financial institutions protect themselves and their reputation from the criminals and help law enforcement to track down and arrest those criminals.

DUE DILIGENCE
The words Due Diligence in the financial sense describe the process by which a bank or financial institution checks the identity, background and other aspects of the source of wealth of potential and existing customers.

ANTI CORRUPTION
Anti Corruption refers to the efforts of banks and other financial institutions to combat this illegal activity and prevent the laundering of Proceeds of Crime at the earliest possible opportunity.

TERRORIST FINANCING
Terrorist Financing is opposite of money laundering clean money (often in legitimate donations to charities) misdirected by account holders to their criminal colleagues in what appear to be legitimate activities (again, often charities but it can be any form of institution). And it need only take a small amount of money to launch such an attack, so defenses need to be strong.

Types of accounts

BENEFICIAL OWNER ACCOUNT

This is an account opened by investors to hold their physical share in the electronic form i.e. dematerialized form and to sell and purchase the security in the demat account.

CLEARING MEMBER ACCOUNT

A registered member of any of the stock exchanges that have direct connectivity with the depositories and holds a clearing member account or pool account. Pool account is used by the members to hold securities from clients and deliver them to clearing corporations.

INTERMEDIARY ACCOUNT

The intermediary is the institutions who first have to get registered by the SEBI and it should be approved according to the stock lending scheme. It is used for the purpose of Clearing and Settlement. Intermediary Account is an account which can be opened by Broker or clearing Member with DP of NSDL.

Processes

DEMATERIALIZATION

Dematerialization or Demat is a process whereby your securities like shares, debentures etc, are converted into electronic data and stored in computers by a Depository.

REMATERIALISATION

It is exactly the opposite process of dematerialization. It refers to the process of issuing physical securities in place of the securities held electronically in the book entry from the depository.

TRANSACTION IN DEMAT ACCOUNT

Delivery instruction slip (DIS) is the instruction slips through which client gives the instruction for pay-in and pay-out for transaction of securities.

TRADING AND SETTLEMENT PROCESS

PLEDGING

The creation of pledge and hypothecation is done against securities. Securities held in a depository account can be pledged or hypothecated against a loan, credit, or such other facility availed by the beneficial owner of such securities. Corporate actions are events, affecting the rights, obligations and/or interests of the beneficial owners of the securities held in a depository. Events in corporate actions are interest, dividend, bonus shares, rights, splits, merger, redemption, payment of call money, liquidation etc. there are two types of corporate actions An action taken by a bank or brokerage that prevents any transactions from occurring in the account. Typically, any open transactions will be cancelled, and checks presented on a frozen account will not be honored.

CORPORATE ACTIONS

FREEZING OF ACCOUNTS

SWOT ANALYSIS

STRENGTHS

Timely meetings resulting in bank to stay up-todated Strong Coordination among team. Low AMC charges as compared to other banks. Well known in Thane. No minimum balance required to open demat a/c.

WEAKNESS

Bank doesn't have permission to give trading facility to demat account holders being a cooperative bank. Lack of awareness among the customers about dematerialization. Weak advertisement policies.

OPPORTUNITIES

Large untapped market. Opportunity to educate investors about their products & inspire them to invest more &encourage other. Chances of increase in customers (especially those interested in trading) due to tie-up with KARVY. Advertisements on television will help to attract more customers. Good Opportunity to Cash its Brand Image and People Trust.

THREATS

Low risk taker which may lead to loss of high returns. All others private sector banks. Presence of very strong competitors like Angel broking, Religare, sharekhan, Etc. Aggressive marketing by competitors.

Suggestions and recommendations

Advertisements should be made on televisions and print adds posters should be put near railway stations to attract more and more customers. Seminars should be kept in the branches for the customers to spread awareness. Bank should provide door step services for demat account opening. Factors such as trading facility, good service, low cost of maintaining account and free account opening should be taken care by bank. Proper training should be provided to the staffs about the services and its objective as they are the main source to influence the customers. Customers having saving and current account in the bank should be convinced to open demat account in the bank.

Thank you