 |
| PLEDGE OF DEMAT SECURITIES |
|
|
|
| Can the demat securities be pledged? |
|
A BO can, not only pledge his demat securities, but, may also be able to obtain higher loan amounts, with reduced margins & lower rate of interest. Moreover, procedure for pledging securities in demat form is very convenient, both, for the pledgor and the pledgee. |
|
 Top |
|
| What is the procedure for pledging securities? |
|
|
| a) The pledgor and the pledgee must have BO accounts with CDSL. These accounts can be with the same DP or with different DPs. | | b) The pledgor has to fill up the Pledge Request Form (PRF) in duplicate available with his DP. | | c) On receipt of the PRF, the pledgor's DP verifies that the securities can be pledged. The DP then sets up a pledge in the depository system and a unique Pledge Sequence No. (PSN) will be generated. | | d) One copy of PRF (with the PSN) should be sent to the pledgee by the Pledgor. The Pledgee will then countersign the PRF for acceptance/ rejection of the pledge request and submit the PRF to his DP. | | e) The pledgee's DP has the facility to access the request on line. Based on copy of PRF the pledgee's DP either accepts or rejects the pledge request. |
|
|
| Top |
|
| How are the securities unpledged in the depository system? |
|
|
| a) The pledgor has to fill up the Unpledge Request Form (URF) in duplicate available with his DP. | | b) On receipt of the URF, the pledgor's DP sets an unpledge request in the depository system using the PSN generated at the time of creating the pledge. An unpledge request can be for part or entire quantity of pledged securities. | | c) One copy of URF (with the PSN) should be sent to the Pledgee by the Pledgor. The Pledgee will then countersign the URF for acceptance/ rejection of the unpledge request and submit the URF to his DP. | | d) The pledgee's DP has the facility to access the request on line. Based on copy of URF the pledgee's DP either accepts or rejects the unpledge request. | | e) The securities can also be unpledged by the Pledgee giving duly filled URF to his DP instructing to unpledge the securities. This facility is called " Auto Unpledge" where no instruction is required to be given by the Pledgor. |
|
|
| Top |
|
| How is a pledge invoked? |
|
In case of default by the pledgor, the pledgee, after giving notice to the pledgor as per the terms of the agreement, may instruct his DP to invoke the pledge by submitting the "Invocation Request Form" (IRF). On execution of this instruction, the securities are transferred into the pledgee's account. This does not require any confirmation from the pledgor. |
|
| Top |
|
| Are all securities pledgeable? |
|
All securities other than Government Securities can be pledged. |
|
| Top |
|
| Are locked-in securities eligible for pledge? |
|
CDSL system permits locked-in securities to be pledged. However, it is the option of the pledgee to accept such securities in pledge. A locked-in security cannot be invoked by the pledgee. |
|
| Top |
|
| Who receives corporate benefits on the pledged securities? |
|
The pledgor continues to remain the beneficial owner of the pledged securities and will, therefore, be receiving the corporate benefits during the period of pledge. |
|
| Top |
|
| Can the securities pledged with a bank be dematerialised? |
|
The pledged securities can be dematerialised with the prior permission of the pledgee bank. |
|
| Top |
|
 Back |
