Lakshya

Banking & Capital Markets Systems · Chapter 7 of 13

Custody, depositories, and the settlement fact everyone gets wrong

CDSL and NSDL do not split the market the way people assume, and India has not moved to T+0.

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THE FASTEST-DECAYING FACT IN INDIAN MARKETS — AND THE MOST CONFIDENTLY MISSTATED T+1 — MANDATORY, AND REAL All listed securities since 27 January 2023, phased in from February 2022 starting with the smallest names and working upward. This is the baseline. Say this one. T+0 — OPTIONAL, AND STALLED Beta circular 21 March 2024. Equity cash only, never F&O. 25 stocks at launch, expanded to the top 500 by 31 Jan 2025. Adoption reported as “negligible”. THE BROKER-SIDE DEADLINE, WHICH KEEPS MOVING 1 May 2025original date for QSBs1 Nov 2025pushed“communicated later”pushed again, to nothing Do NOT say “India has moved to T+0.” It has not. T+1 is the mandatory baseline. T+0 is an optional pilot with an unset deadline as of late 2025. Re-check before quoting either. AND THE DEPOSITORY SPLIT, WHICH IS BACKWARDS FROM WHAT PEOPLE ASSUME CDSL leads on ACCOUNT COUNT — ~78–80%, roughly 16.5 crore accounts. The high-volume retail layer. NSDL leads on VALUE HELD — over 80%, crossing ₹500 lakh crore in Sept 2024. The institutional and FPI layer.
Both halves of this diagram are commonly misstated — the settlement cycle in the direction of optimism, the depository split in the direction of assuming they are the same.

The depositories are not interchangeable

Both are SEBI-regulated and both hold securities in dematerialised form, but they have ended up serving different halves of the market. CDSL leads on account count — roughly 78 to 80% of demat accounts, about 16.5 crore of them. NSDL leads on value held — over 80%, crossing ₹500 lakh crore in September 2024.

In FY25, NSDL's revenue exceeded CDSL's (₹1,420 crore against ₹1,082 crore) while CDSL's profit exceeded NSDL's (₹526 crore against ₹343 crore). CDSL owns the high-volume retail layer; NSDL owns the high-value institutional and foreign-investor layer. Those are genuinely different engineering problems, and it is worth knowing which one you are interviewing at.

Custody

SEBI requires a foreign portfolio investor's Designated Depository Participant and its Custodian to be the same entity — a structural constraint that shapes how the custody business is organised. The custodian population is a mix of global banks (Citi, HSBC, Deutsche, Standard Chartered, BNP Paribas, JPMorgan) and domestic ones (Axis, HDFC, ICICI, Kotak, SBI and SBI-SG).

SEBI's own published custodian list is from 2012 and is stale. Most registrations on it expired in 2012-13, and at least one name — RBS's India custody business — no longer exists. Axis and HDFC confirm active FPI custody today, so the general shape holds; the list does not.

And the platform question is unanswerable from public sources. TCS BaNCS claims 8 of the world's top 10 custodians — a global figure — but no Indian custodian's core platform could be confirmed, and no Broadridge client in India was found at all.

Check yourself

Which depository is bigger?Neither, and the split is the point. CDSL leads on account count (~78–80%, ~16.5 crore); NSDL leads on value held (>80%, ₹500+ lakh crore as of Sept 2024).
Has India moved to T+0?No. T+1 has been the mandatory baseline for all listed securities since 27 January 2023. T+0 is an optional equity-cash-only pilot whose broker deadline slipped from May 2025 to November 2025 to unset.
What does SEBI require of an FPI's custodian?That the Designated Depository Participant and the Custodian are the same entity.
Can you find out which platform an Indian custodian runs?Not from public sources. TCS BaNCS claims 8 of the global top 10 custodians, but no Indian custodian's core could be confirmed and no Broadridge India client was found.
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