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The Board of Directors of the National Securities Depository Limited (NSDL) today decided that the custody charges being charged by NSDL to the Depository Participant (DP) will be lowered from 2 basis points (0.02%) p.a. to 1 basis point (0.01%) p.a. with effect from April 1, 1999. This would mean that on a total custody value of Rs. 1,00,000/- a DP will have to pay Rs. 10 per year to NSDL. This decision has been taken in line with NSDL's policy that as the volumes grow, the custody charges are brought down. In fact, NSDL had earlier reduced the custody charge from 7 basis points to 3.5 basis points p.a. w.e.f August 1, 1997 and again from 3.5 basis points to 2 basis points w.e.f. October 1, 1998. The Board took this decision after taking into account the fact that the dematerialisation process had gained substantial momentum during the last one year.

The Board of Directors has also decided to lower the settlement fees based on the value of the securities received from the clearing corporation into the clearing member accounts held with DPs from 5 basis points (0.05%) to 4 basis points (0.04%) with effect from April 1, 1999. This decision was taken after noting the significant increase in the trading and settlement volumes in demat securities in the eight stock exchanges connected to NSDL.

NSDL hopes that the DPs will pass on the benefit of this reduction to the investors.