vikas maheshwari-05106-it implementation in simplifying demat process

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IMPLEMENTATION OF ‘IT’ IN SIMPLIFYING DEMAT APPLICATION PROCESS

M. P. BIRLA INSTITUTE OF MANAGEMENT 1 REG. NO. – 05XQCM6112

A PROJECT REPORTOn

Implementation of ‘IT’ in simplifying Demat Process

Submitted in partial fulfillment of the requirements of the

M.B.A Degree Course of Bangalore University

ByVIKAS MAHESHWARI

Registration. No: 05XQCM6112

2005 – 2007

Under the Guidance and Supervision of

Prof. B. SRINIVASAN

M.P.BIRLA INSTITUTE OF MANAGEMENT

Associate Bharathiya Vidya Bhavan

#43, Race Course Road

BANGALORE-560001





DECLARATION

I hereby declare that this report on IMPLEMENTATION OF ‘IT’

IN SIMPLIFYING DEMAT PROCESS is a record of independent

work carried out by me towards partial fulfillment of requirements

of the Master of Business Administration course of Bangalore

University at M.P.Birla Institute of Management. The report has

not been submitted in part or full towards any other degree or

diploma.

Place: VIKAS MAHESHWARI

Date: Registration No.: 05XQCM6112





PRINCIPAL’S CERTIFICATE

This is to certify that the Project Report on IMPLEMENTATION OF ‘IT’

IN SIMPLIFYING DEMAT PROCESS, has been prepared by Mr.

VIKAS MAHESHWARI bearing Regn. No. 05XQCM6112 under the

guidance and supervision of Mr. B. Srinivasan, Professor, M P Birla

Institute of Management, Bangalore.

Place: Dr. N S Mallavali

Date: (Principal)





PROJECT GUIDE’S CERTIFICATE

This is to certify that the Project Report on IMPLEMENTATION

OF ‘IT’ IN SIMPLIFYING DEMAT PROCESS has been prepared

by Mr. VIKAS MAHESHWARI bearing Regn No. 05XQCM6112.

It is a bonafide work and has been carried out under my guidance

and supervision, during the academic year 2005-07 in partial

requirement for the award of MBA degree by Bangalore

University. To the best of my knowledge this report has not formed

the basis for the award of any other degree or diploma.

Place: Mr. B. SRINIVASAN

Date: (Professor)





ACKNOWLEDGEMENTS

I extend a heartfelt thank you to the respondents of my

questionnaire for having taken time of their busy schedule to

provide me with valuable inputs.

I express my deep sense of gratitude to Prof. B.Srinivasan, M. P.

Birla Institute of Management (MPBIM), Associate Bharatiya

Vidya Bhavan, Bangalore, for his most valuable guidance,inspiring supervision, periodical monitoring and sparing his

precious time in my project.

I am grateful to Dr. N. S. Malavalli, Principal, MPBIM for

providing the facilities.

I am indebted to my family and friends who encouraged me always

in my study.

Vikas Maheshwari





Table of contents

Particulars Page No

Executive Summary 1

Overview 3

Typical procedure for opening a Demat Account 8

Problem Overview 11

Review Literature 13

Need for simplifying Demat Process 18

Loopholes in Demat Account Process 20

Various Accounts and their functions 23

Working of the Accounts 26

Possible measures to simplify Demat process 28

5 Step Process 30

Advantages of Online Application Process 34

Proposals by Income Tax Department 35

Research Design 37

Data Analysis and Interpretation 39

Conclusion 59





Bibliography 61

AnnexureSample Questionnaire

Sample Demat Application Form

62





EXECUTIVE SUMMARY





INTRODUCTION

With the number of investors increasing in India day by day the equity market isgrowing phenomenally. More and more people are investing in the equity market

as it is a good option to get high returns. In order to invest in the equity market

one needs to have demat account.

A demat account is held by a person so that he can keep track of his investments

and to make sure that there is no illegal trading of shares in his account. A

person can open his demat account with any stock broking firm and that firm

facilitates the person to trade in the market by taking care of his investments andworks as a broker between the person and the company. With the increase in

working population, people are opening demat account and this number is not

going to decrease, but not increase.

In this world of technology the process of filling application form for demats

account is still not very user friendly. It is very time consuming and tedious.

The project has been undertaken to find a simple way of filling up the applicationform with the aid of IT implementation.





OVERVIEW





Introduction to Demat account

What is a demat account?

Demat refers to a dematerialized account.

Just as one opens a bank account to save money, make cheque payments etc,

one needs to open a demat account to buy or sell stocks. So it is just like a bank

account where actual money is replaced by shares.

One has to approach the Depository Participants – DP’s (they are like bank

branches), to open a demat account.

If there is a portfolio of shares: 40 of Infosys, 25 of Wipro, 45 of HLL and 100 of

ACC.

All these will show in the demat account. So, one need not possess any physical

certificates showing the ownership of these shares. They are all held

electronically in the demat account. As one buys and sells shares, they are

adjusted in the demat account.

Just like a bank passbook or statement, the DP will provide the demat account

holder with periodic statements of holdings and transactions.





BANK – DEPOSITORY: AN ANALOGY

BANK DEPOSITORY

Holds funds in an account Hold securities in an account

Transfers funds betweenaccounts on theinstruction of the accountholder

Transfers securities betweenaccounts on the instruction ofthe account holder

Facilitates transferwithout having to handlemoney

Facilitates transfer ofownership without having tohandle securities

Facilitates safekeeping of

money

Facilitates safekeeping of

securities





Is opening a demat account compulsory?

These days, practically all trades have to be settled in dematerialized form.

Although the market regulator, the Securities and Exchange Board of

India (SEBI), has allowed trades of up to 500 shares to be settled in physical

form, nobody wants physical shares any more.

So a demat account is a must for trading and investing.

How can one apply for a demat account?

Look for a DP with whom you want to open an account.

Most banks are also DP participants, as are many brokers. One may choosetheir very own DP.

A broker is separate from a DP. A broker is a member of the stock exchange,who buys and sells shares on his behalf and on behalf of his clients.

A DP will just give an account to hold those shares.

One need not have to take the same DP that the broker takes. One may makehis own choice.

But many brokers offer special incentives in the form of lower charges foropening demat accounts with their DPs.

Get documents in place

The DP will guide his client through the formalities of opening an account.

Fill up the account opening form and sign an agreement with the DP.

The DP will ask for some documents as proof of identity and address. Some mayaccept a driver's license, others may not.





Here is a broad list (all may not be required):

PAN card

Voter's ID

PassportRation card

Driver's license

Photo credit card

Employee ID card

Bank attestation

IT returns

Electricity/ Landline phone bill

Only photocopies of the documents are asked, however the originals will be

needed for verification.

A passport size photograph with the account holders signature across, also

needs to be submitted.





TYPICAL

PROCEDURE FOR

OPENING A DEMAT

ACCOUNT





Step4 :

After getting approval from SEBI, the DP allots the customer a unique account

number in order to facilitate future transactions. Also it gives a userid and

password to the customer to facilitate him with the online trading. The customerreceives these documents by courier.

Step5 :

Once the customer receives all these documents, he has to activate his account

by going to DP. And from hereon he can trade online.





PROBLEM

OVERVIEW





In the world of technology where everything is getting transferred into electronic

form, this is one process where even after tremendous implementation of internet

in the form of trading online and settling transaction over the internet, the process

of applying for demat account is still following traditional methods.

The process of filling up a demat form is so cumbersome and redundant that a

customer gets frustrated in filling up the form and many a times commits

mistakes in filling up of the form. The rejection rate of demat application in DP’s

is phenomenal as very rarely it happens that a customer fills the form and gets

his id and password in single instance. Several times the form gets rejected and

the customer has to provide the documents repeatedly.

The question then arises – What is the need to fill the demat form manually when

everything is available online right from trading of shares to transfer of money

and settling of accounts? Can’t the demat application process be made available

online?





R EVIEW OF LITERATURE





Purpose of the review

A review of various literatures available would help in providing me with a better

understanding of the various nuances involved in the process of opening a

Demat Account.

Source: Rediff.com, Authored by: Devangshu Datta

Title: Why is demat a pain?

A virtual queue is an apparent oxymoron. But Indian systemic inefficiency has

turned it into reality. The dematerialization process for paperless trading of

shares has created a virtual queue, which will take months, if not years, to

process. It has also highlighted several inefficiencies in the new system and

thrown up an important new tax issue.

Demat ought to take care of many inefficiencies. The tedious process of

physically transferring ownership of shares is shortened. Instead of several

months, ownership is supposed to change hands instantly. The chance of a bad

transfer because a signature doesn't match is reduced to zero. So are the

opportunities of thievery in the mail or forged share certificates. The twin

problems of odd lots and jumbo lots both disappear since it is possible to trade

either a single demat share or lakhs at a shot.

So demat solves various familiar problems that plague every stock market that

operates with physical paper. No wonder when SEBI initiated the process of

demat it was welcomed wholeheartedly by most investors.

Some insecure company managements dislike rapid, unsupervised transfer of

ownership. The odd unscrupulous investor who deliberately messed up his

signature and gave bad delivery in order to obtain interest-free cash also dislikes

demat. But the vast majority welcomed it. One instantly beneficial effect was the

easing of brokerage rates. Another was a vast increase in institutional volumes.





But then problems started surfacing. First of all, the demand for demat services

was severely under-estimated. According to estimates, there are now 9 million

pending individual applications for demat accounts. The system has been

overloaded and reached a breaking point. As a result, somebody opening a

demat account can expect to spend several months waiting for the paperwork to

be completed.

Meanwhile, a physical trading route does exist for the individual investor who

needs to raise cash in a hurry. But while a physical sale is possible, all transfers

(in the shares of designated companies) now involve a compulsory demat. Since

the buyer of physical securities must factor in a long waiting period, there is a

wide differential between paper trade quotes and demat quotes. The discount onphysical paper is now around 15 percent, or more.

The amount of paperwork involved in the demat process is also seriously painful.

Some of it is absurd. For example, if Mr and Mrs Haridoss Paul hold some

shares in the name of Mr & Mrs Haridoss Paul and a second batch in the name

of Mrs & Mr Haridoss Paul, they will need to open two demat joint accounts with

their names reversed! There are other niggling little details.

Brokers and banks are therefore quite reluctant to initiate the process for their

clients. Some refuse outright. Others disregard the SEBI directives and insist that

demat clients open low-interest or zero-interest accounts as a sort of extra fee. At

a minimum deposit of Rs 1,000 per demat account and 9 million individual

accounts, the amount already blocked in these low-interest or zero-interest

accounts adds up to around Rs 900 crore. Assuming this trend continues, and

given that there are more than 23 million individual investors, the eventual cost of

demat would include sub-optimal returns on about Rs 2,300 crore. That is a large

and unforeseen opportunity cost for any new system.

There are further problems. The simple fraud of stealing a share certificate out of

the mail and selling it in the kerb is no longer possible with a demat account. But





the only proof of ownership for demat shares is a receipt. Trades and transfers

are carried out on the basis of that piece of paper. Anybody who has the account

number and knows the details can order a transfer of shares from one account to

the other very easily.

Forgery is actually easier. The receipt itself isn't too difficult to duplicate either.

Frauds of this nature haven't started happening yet at least on a large enough

scale to draw attention. But it is something that gives the investor pause for

serious thought. It's bound to occur sooner or later. And given the lack of a paper

trail, it will be difficult to establish the fraud, let alone prosecute and offer relief to

victims.

Another problem lies in the tax treatment of demat shares. With dated physical

transfer certificates, it is fairly easy to calculate Capital Gains Tax (CGT) liability.

Suppose the investor has two lots of shares of the same company. One lot was

bought several years ago and is hence, liable only to long-term capital gains tax,

in case of a sale. This is levied at 10 per cent flat or an inflation-indexed at 22 per

cent whichever is lower. The second lot was, however, bought within the last

fiscal. This is liable to 33 per cent short-term CGT in the event of a sale.

If you sold a physical lot, presumably you would deliver the older set to minimise

the payout. But in case of a demat, there is an extremely grey area about which

CGT rate should be levied. The Central Board of Direct Taxes hasn't worked out

a clear procedure for distinguishing the earlier lot from the later lot. You could

find yourself locked in a dispute and facing a demand for short-term capital gains

tax. This is obviously of major significance.

There are several more niggling problems. In theory, the demat is supposed tobe within 24 hours. However, PSU bank timings don't conveniently overlap

trading times. Banking hours close at 2 pm while trading continues till 4.30 pm.

On average, a transfer will take 48 hours or more. On occasion, the demat

account may be temporarily credited with shares pending confirmation of a





transfer. An unwary investor who sells without ensuring that he has actually

received a confirmed transfer is open to everything starting from severe

embarrassment and ending with charges of fraud.

None of these problems are insurmountable. But it will require a coordinatedeffort from various agencies to sort them out. SEBI and RBI have to come up

with a way of streamlining the demat process and regularising the status of

deposits accepted, if any. The NSDL and CSDL will have to speed up their

registration procedures and devise a more foolproof system of receipt and

transfer. Banks and stock exchanges will have to coordinate working hours and

the use of temporary entries. The CBDT will have to come up with clear tax

guidelines.

None of these are processes, which needed to be ratified or mandated by

Parliament. So the excuse of political instability cannot be trotted out for delays.

Demat has already been in progress for a year.

How much longer will it take to clear up the virtual queue? Your guess is as good

as mine.

Opinion: Dematerialization process has definitely removed much inefficiency

such as physical transfer of shares, change of ownership, etc. but industry could

not estimate the demand of Demat accounts. There are some nine million

applications pending for the Demat account. Paper work involved in the Demat is

very painful and hence a pressing need to simplify the process.





NEED FOR SIMPLIFYING

DEMAT PROCESS





The latent need to simplifying demat process is due to various reasons

1. Awareness among people to invest

People today are investing more and more in equity market. With the

rising income and expenditures scenario in India people are looking at

other options to earn quick money and for that equity market is one of the

best options where one can get high returns in short period of time, not

forgetting the risk involved in it.

2. PAN Card - a mandatory document.

Since SEBI has made it mandatory to give PAN card details with everydemat account, people are applying for PAN card in large number.

According to the tax department, every month 5 lakh PAN cards are

issued in India. Keeping in mind the working population of India, this

number is very small. Also, the number of people adding up to this

population is phenomenal as more and more jobs are coming to India.

3. Increasing use of Internet for trading purpose.

With the increasing use of Internet, people are avoiding the traditional

methods of trading i.e. going to the broker and asking him to trade on his

behalf. Now a person can sit at home and trade according to his

convenience. He does not have to rely on the broker and wait for his

approval for buying or selling of shares. This has facilitated more and

more people to start trading and hence more and more people are taking

interest in it.





LOOPHOLES IN DEMAT ACCOUNT

PROCESS





1. Form for Demat Account

Today when the organizations such as Banks and Airlines are stressing to

reduce the unnecessary paperwork in order to cut costs, the form for opening

the demat account still follows a traditional approach - that of a bookletcontaining some 50 to 55 pages. A customer maybe put off at the first instance

as soon as he sees the booklet. It is difficult to understand its complicacies. The

process of filling up the form is very cumbersome and redundant. One has to

provide about 50 to 55 signatures in the form. A customer also has to provide

all the details repeatedly. For example; customer has to write his name in the

form about 10 to 15 times. There is no real need to do so, when the form is only

for a single applicant.

2. The Verification process

Verification of documents is done in 2 stages. First the DP verifies the

documents provided and then sends the same to SEBI. SEBI in turn verifies the

documents. If they find any mistakes or inconsistencies in the documents they

reject the form and the customer has to fill in the form again right from thebeginning. This results in phenomenal wastage of paper which results in not

only higher costs but also wastage of time for all parties concerned. The

rejection rate of demat forms is very high. It rarely happens that form is

approved by SEBI at the first instance.

3. Allotting DP id and passwords to the customerOnce the form gets approved, the customer gets his DP id, username and

password. After that the customer has nothing to do with SEBI. He has to

conduct all his future transactions and conversations with his DP.





There is no paper work after that. Right from trading of shares to transfer of

money to settling of account is done electronically.

4. Changing Passwords every fifteen days

One important rule given by SEBI to all its DP and their customers is that they

have to change the password of their online demat account every 15 days. This

is to make sure that nobody misuses the demat account. The password is given

at two stages. At the initial stage of logging in to the account. And then when

the customer has to conduct transactions.





VARIOUS ACCOUNTS AND

THEIR FUNCTIONS





Demat A/C

This is an account where all the shares are kept in electronic form. Demat

account is kept with the respective DP who keeps the record of shares in a

customer account. A demat account is a universal account which is given to a

customer once and after that the customer can keep this account with any DP.

If a person wants to change his DP client he can do so without opening a new

demat account. All he has to do is give an application to the SEBI and they will

change the DP id without changing the demat account number.

Trading A/C

DematA/C

TradingA/C

SavingA/C





Trading account is where a person keeps the money in electronic form and

does the trading of shares. Trading account is kept with the DP. It keeps the

money used for trading purpose and facilitates the customer to use this money

when he is trading online. Also whatever charges are there for deduction in

terms of brokerage, service charge, or dividends paid, are charged to the

trading account only.

Savings A/C

Savings account is where the person keeps his money in the physical form.

The account is kept with a bank and the demat account holder can transfer

money from bank account to trading account and vice-a-versa. Generally it

takes a day’s time or two to transfer the money within the accounts. The DP

does not deduct any amount for transferring money.





WORKING OF THE ACCOUNTS





The three accounts work in synchronization with each other:

The customer transfers money from his bank’s savings account to the trading

account. The procedure takes 2 days and the money gets transferred.

Once money is credited to the trading account, the customer can start online

trading. He can buy or sell shares and the money gets debited or credited to

his account. Trading account is kept with the DP so the DP takes charge for

facilitating the customer in terms of brokerage. This brokerage gets deducted

from the customer’s account while settling of accounts takes place.

When a customer buys the shares of a certain company these shares are kept

in the demat account in the electronic form. These shares are non

transferable and customer cannot trade these shares without the help of a DP

or any broker. If a customer wants to transfer the shares to any other DP he

can do that by requesting the DP to transfer the shares to other DP.





POSSIBLE MEASURES TO SIMPLIFY THE

DEMAT PROCESS





Looking at the process of filling up a demat application form, it is very much

required to simplify the whole process to make it more user friendly. Keeping in

mind that the customer base includes people from working class to businessman

to common man who don’t want to miss the chance to try his hand in equity

market, the demat form should be as simple as opening an account in a bank.

The most important documents required for opening a Demat Account are:

1. PAN Card

2. Address Proof

3. Bank A/c Proof

PAN card has been made mandatory by the government of India for all thedemat account holders because it keeps track of all the transactions and profit

made by the customers. A customer has to give his PAN card details if he is

opening a Demat account. Those who are already having a Demat account have

to give the PAN card details, failing which their account will be terminated.

Address Proof is taken by the DP for future correspondence and for sending

transaction details and statements, and to ensure authenticity of the applicant.

The main aim of this research is to remove the paper work and convert the

process of filling up the demat form into electronic form i.e. online application and

filling up of demat form so that customer does not have to wait so long for the

demat account.

The process is not so simple so DP’s have to help the customer in filling up the

form.

A customer can apply for the form by going to a DP and ask him for the Demat

Account.





5 STEP PROCESS





The whole process can be improvised and converted into a simple 5 step

process:

Step1 :

The customer who desires to open a Demat account selects the DP, goes to him

and applies for the same. DP asks for the required documents and the customer

provides them.

Step2 :

The whole form can be generated electronically by the DP’s and an expert

provided by the DP can fill the form on behalf of the customer. The various fields

in the application which are repeatedly asked can be reduced in the electronic

form as once a field is filled, other fields can take the entry from that field, hence

reducing the work.

Step3 :

PAN card details can be checked from the PAN card website of India. DP can

pay a certain amount to the Government of India for allowing them access to the

customer database which they can include in the account opening fees.

The PAN details can now be confirmed i.e. customer credibility is proved that he

is a resident of India who pays taxes on time and it also gives his permanent

address details which may differ from his present address but are credible. Also it

gives correct details of his Father’s name and his date of birth which are requiredin the demat form.





Step4 :

Address proof is the second important document required for the opening of

demat account. It is required to send the statements, transaction receipts and

other important documents which are generated during the trading process.Customer can provide the details and the DP can enter the address immediately.

The documents sent to the customer are not so important so there is no need for

the DP to go and verify the address of the customer.

Also, if a customer does not wish to receive the statements in the physical form

he can always intimate the DP about the same. All the transaction details and

statements are available online in the trading account. The customer can always

refer to the online version.

Step5 :

Bank details are the next and last document required by the DP to verify

customer’s credibility. Customer can give bank statements along with the cheque

of requisite amount for opening of demat account. The credibility of the bank

details can be proved by the cheque submitted in the bank. If there is no cash in

the account, the cheque will bounce. So there is no need for the DP to verify it.

Signatures

A very important field of the form is signatures of the customers. The DP can

take a proper signature of the customer and they can scan these signatures and

keep it in their database. All the banks are following the same procedure to check

or match a customer’s signature.

This is a convenient way of keeping customer’s signature. Also while trading

shares the physical signatures are not required so there is no need to cross

check the different signatures.





Photographs

Photographs of a person can be taken instantly by digital cameras and can be

transferred directly to the form field. This facilitates the DP’s to provide the latest

photo of a person to SEBI for identification purposes. This also checks the factorof authenticity as the applicant cannot forge any photograph and furnish incorrect

information.

As soon as all these formalities are done a customer can get his username and

password and he can activate the demat account immediately with the DP. Also

he can get a demonstration on operating the account and trading of shares.





Advantages of Online Application Process

1. User friendly

A customer will find the online demat application process more userfriendly. The redundancies can be reduced by not repeating the fields.

2. Time saving

It saves time of a customer as well as of DP by preventing duplication,

redundancies and rejections.

3. Safe and convenient

The process of online demat application, would be more safe and

convenient to fill than offline. One can have a look at all the options and

choose the fields accordingly. Also changes or alterations if any can be

made conveniently.

4. Immediate account

Customer can get his online demat account almost immediately. He does

not have to wait for the DP to send him his username, password and other

details by courier. Also the risk of courier being lost or misplaced is

eliminated as every detail is available on the internet.

5. Reduction in paperwork

Paper work is reduced drastically which firstly saves the stationery costs

and secondly reduces the verification job for SEBI.

6. Cost Saving

It also saves money as the whole process is electronically done and there

are significant cost savings on stationery, courier, verification, etc.





PROPOSAL BY

INCOME TAX

DEPARTMENT





The Income-Tax Department proposes to use biometric features such as

fingerprints and retina images in permanent account number (PAN) cards to

ensure the uniqueness of such numbers and prevent the allotment of more than

one PAN to a person.

For this purpose, the Department has sought inputs from organizations engaged

in providing biometric solutions. Such entities have been asked to submit a

synopsis of their expertise in this area by.

The Department is keen to have a biometric solution that would be cost-effective

and one that does not lead to long queues of applicants at the front offices.

The Department uses the PANs to identify its taxpayers. Till date, about 4.6 crorePANs have been issued. About five lakh new PANs are allotted every month.

Currently, NSDL and UTI Technology Services manage the interface with PAN

applicants.

These two service providers operate about 2,000 front offices for PAN services

across the country.

But this will take time as changing 4.6 crore pan cards and is not an easy task

and also the technology required for this work is not readily available in India.

Many places in India still lack the basic facilities so thinking about bringing such

techniques in India is still a dream.





DATA ANALYSIS AND

INTERPRETATION





Findings from the Survey

The survey was carried out with a sample size of 50 people by giving them the

questionnaire and taking their inputs. The conclusion derived from the survey is

as follows:

Table1: Showing number of people having Demat Account

Particulars Respondents Percentage

Yes 40 80%

No 10 20%

Interpretation

Out of 50 people, who were given the questionnaire, 40 of them were having

their Demat Account in one or other company.

10 of them were not having any Demat account.

The reason when asked, were many such as, most of them were not aware of

the procedure of opening Demat Account, and some of them were not

investing in the equity market.





Inference

The scenario in India is changing now days. People are investing more and

more in equity market. The data shows that many people know about the

demat account and its process. Very few of them are not aware of theprocess. They are the one who are not investing in equity market.

Graph1: Showing number of people having Demat Account

Number of people having Demat Account

Yes80%

No20%





Table2: Showing level of ease of opening a Demat Account

Particulars No. of Respondents Percentage

Very Simple 5 12%

Simple 7 18%

Cumbersome 18 45%

Very Cumbersome 10 25%

Interpretation

5 out of 40 people think that the process is very simple and they don’t find any

difficulty in opening the account.

7 out of 40 people think that the process is not very simple but they can

understand it well and fill the form.

18 out of 40 people think that process is very cumbersome and they had to takesomeone’s help to fill up the form.

10 out of 40 people think that the process is very difficult and they couldn’t

understand it.

Inference

Though 30% of the people think that the process is very simple and they did not

find any difficulty in understanding and filling up of the form. But majority of them

find it very difficult. The process is very cumbersome and some of them couldn’t

understand it. They somehow managed to fill the form.





Table3: Showing cumbersome aspects of the Demat Application form.


Lengthy Application form 20 50%

Too many signatures 22 55%

Repetitive Field 15 38%

Interpretation

Half of the respondents feel that the application form is too lengthy

More than half of the respondents feel that there are too many signatures field in

the form which needs to be removed.

Some of them feel that many fields are repetitive.

Inference

More or less all of the respondents feel that the application form is very lengthy

and there is too much to read. Also the number of signatures which a customer

has to do is too much which makes him crazy sometimes.

There are many fields which repeat themselves again and again. The customer

feels there is no need for the duplication of the information. Once given it should

be considered same everywhere.





Graph3: Showing cumbersome aspects of the Demat Application form.

0

510

15

20

25

LengthyApplication

form

Too manysignatures

RepetitiveField

Graph Showing cumbersome aspects of theApplication form.

Series1Series2





Table4: Showing needs to simplify the process.


Yes 28 70%

No 5 13%

Can’t say 7 17%

Interpretation

Seventy percent of the respondents say that the process should be simplified

Thirteen percent of the respondents say that the process need not to be

simplified and they are okay with it.

Seventeen percent of the respondents did not intend to change neither they were

okay with the process.

Inference

Majority of the respondents feel that the process needs to be changed and

improved. They feel that the whole process is very cumbersome and time taking.

Very few of the respondents feel that the process need not to be changed and it

should remain as it is. And some of them were there who feel that though the

process is cumbersome but they don’t want to change it.





Graph4: Showing needs to simplify the process.

Graph Showing needs to simplify the process.

Yes

69%

No13%

Can’t say18%





Table5: Showing safety aspects of Demat Account


Not So Safe 10 25%

Very Safe 25 63%

Can’t Say 5 12%

Interpretation

Twenty five percent of the respondents say that the Demat account is not so safe.

Sixty three percent of the respondents say that the Demat account is very safe

and no one can misuse it without their knowledge.

Very few of them don’t know whether it’s safe or not. The reason being they are

not using it, or they hardly trade or some other person trade on their behalf.

Inference

Most of the respondents feel that the Demat Account is a safe account where

nobody can misuse it without their knowledge. They feel that there is ample

security given to protect their privacy. Very few who think that it is not safe is

because of the fact they are not very much aware of the internet and its facilities





Table6: Showing most preferred companies for opening Demat Account.


ICICIdirect.com 18 45%

India Bulls 10 25%

Motilal Oswal 5 12%

Others 7 18%

Interpretation

Majority of the respondents were having their Demat Account in ICICIdirect.com.

Next come India Bulls where twenty five percent of the respondents were having

their account. Few of them were having accounts in other companies like Motilal

Oswal, Share Khan, Geojit Securities, Etc.

Inference

ICICIdirect.com still holds the first position in stock broking companies. It is

having maximum number of customer base and is the leader in this industry.

India Bulls is second in the race and it has grown a lot in last few years.

Other players in industry like Share Khan and Motilal Oswal are also there who

have captured a pretty good customer base.





Table7: Showing reasons why people chose above companies.


User Friendly 15 38%

Time Saving 8 20%

Less Formality 8 20%

Other 9 22%

Interpretation

Majority of the respondents give preference to the company which is more User

Friendly.

Few of them see time saving and fewer formalities in the process.

Others people give prefer companies where rejection rate is low and they don’t

need to come again and again for the formalities.

Inference

Most of the respondents prefer user friendliness as the most important factor.

They want the executives to be friendly and helping. Also time saving and fewer

formalities are other factors which people expect from the companies. Some give

preference to companies which are established from long time and where

rejection rate of the form is very low.





Graph7: Showing reasons why people chose above companies.

Graph Showing reasons why people chose above

companies.

024

68

10121416

User Friendly Time Saving Less Formality Other

Series2

Series1





Table8: Showing respondents for online Demat Account.


Yes 32 80%

No 5 12%

Can’t Say 3 8%

Interpretation

Eighty percent of the respondents said that they welcome online Demat Account.

Twelve percent of the respondents said they don’t want inline Demat Account.

Eight percent of the respondents didn’t answer anything for this.

Inference

Majority of the respondents welcome online Demat Account and they really liked

the idea. They feel that online application will save their time and money and will

also make the process more simple and user friendly.

Those who were not ready for this concept were having the concern that this will

increase threat to the customers and will increase online crime. Safety was the

concern about which they were worrying.





Graph8: Showing respondents for online Demat Account.

Graph Showing respondents for online Demat

Account

0

5

10

15

20

25

30

35

Yes No Can’t Say

Series2

Series1





Suggestions for improving or simplifying the Demat Application process.

The respondents gave various suggestions to improve the process of filling

demat form. Most of them were very happy with the idea of online demat

application and they felt they are very comfortable with it.

Some of them felt that the companies should keep more and more executives to

help the customer in filling form.

Most of the respondents felt that internet is getting popular amongst the masses

and they are very comfortable with its use.





Table10: Showing Level of flexibility in opening Online Demat Account.


Very Much 30 75%

Not So Much 7 18%

Not at all 3 7%

Interpretation

Seventy five percent of the respondents said that they are very much flexible for

this new process.

Eighteen percent of them said that they are not very okay with the whole idea

and few of them were not at all ready for this.

Inference

Majority of the respondents said they are very much ready to change themselves

according to the new process.

Few of them who were not so ready with the idea or not at all ready with the idea

said that they do not rely on the process and think that this process is not secure

enough.





Graph10: Showing Level of flexibility in opening Online Demat Account.

0 10 20 30 40

Very Much

Not So Much

Not at all

Graph Showing Level of flexibility in opening

Online Demat Account





CONCLUSION





Findings from the survey clearly states that there is latent need to change the

Demat Application process. People find it very cumbersome and difficult to fill up

the form and they feel there is the need to change the process. Also there is

need to develop a process which is user friendly, simple and easy to understand.

Also from the findings, we could find out that online application for opening the

Demat account would be good alternate for the existing and new applicants.

People will welcome the new and improved way of the Demat application form

over the traditional way.





Bibliography:

www.google.com

www.wikipedia.com

www.sebi.gov.in

www.nsdl.co.in

www.cdslindia.com





ANNEXURE





1. Do you have a demat account?

Yes _______

No _______

If No, Why? _______

2. Is the process of opening a Demat Account:

Simple _______

Relatively Simple _______

Cumbersome _______

Highly Cumbersome _______

3. Which aspects of the Demat Application are cumbersome?

Lengthy Application Form _______

Too many signatures _______

Repetitive field _______





4. Is there a need to simplify the process of opening a Demat Account?

Yes _______

No _______

Can’t say _______

5. What do you feel about the safety aspects of a Demat Account?

Not so Safe _______

Very safe _______

Can’t say _______

6. Which company’s Demat Account process is most convenient?

ICICI _______

India Bulls _______

Motilal Oswal _______

Others _______





7. What are the reasons for the company which you stated above?

User friendly _______

Time Saving _______

Less Formality _______

Others

8. Any suggestions for improving or simplifying the process?

9. Would online application for Demat account be a good alternate?

Yes _______

No _______

Can’t say _______




10. How flexible are you in opening Demat Account online?

Very Much _______

Not so much _______

Not at all _______

vikas maheshwari-05106-it implementation in simplifying demat process

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