SEBI has good news for retail investors in the stock market. Market regulator SEBI has increased the Basic Services Demat Account limit five times from Rs 2 lakh to Rs 10 lakh. This is expected to increase retail investors’ participation in the market.
SEBI Issued Circular
SEBI informed us on Friday about increasing the limit of the Basic Services Demat Account from Rs 2 lakh to Rs 10 lakh. For this, SEBI issued a circular. For months, there were speculations that the limit of the Basic Services Demat Account could be increased. With the arrival of SEBI’s circular, all the speculations have proved true. However, it is not going to be effective immediately. SEBI said this change will be effective from September 1, 2024.
It Was Started In The Year 2012
The basic services demat account, also called BSDA, is the basic version of the regular demat account. SEBI introduced it in 2012 to reduce the burden on investors holding small portfolios, i.e., retail investors.
Small Investors Will Get Its Benefit
An essential services demat account provides fewer services than a regular demat account, but it is ideal for investors who do not trade regularly in different market segments. In the current system, investors could keep shares or other securities worth Rs 2 lakh in the basic services demat account. After increasing the limit, investors can keep shares or other securities worth Rs 10 lakh in the basic demat account.
SEBI’s Instructions For Depository Participants
There is no charge in a Basic Demat Account like a regular Demat Account. That is, these accounts prove to be less expensive. These become an affordable option for small investors who do less trading in such a situation. SEBI has directed the Depository Participant to open a Basic Services Demat Account for every eligible investor unless the investor asks to open a regular Demat account through email. Also, the DP has been asked to convert the Demat accounts of all eligible investors to BSDA within 2 months as per the increased limit.
