Customer survey report on

Demat account

Submitted to: Prof. S. Bhattacharya

Submitted by, (Group-11)

Satya Priya Parida (09DF051)
Sohini Bagchi (09DF053)
Somraj Basu (09DF055)
Soumik Parua (09DF057)
Sudipto Ghosh (09DF059)
DEMAT A/C
The term Demat, in India, refers to a dematerialised account. For individual Indian
citizens to trade in listed stocks or debentures the Securities Exchange Board of India
(SEBI) requires the investor to maintain a Demat account. In a Demat account shares
and securities are held in electronic form instead of taking actual possession of
certificates. A Demat Account is opened by the investor while registering with an
investment broker (or sub broker). The Demat account number which is quoted for all
transactions to enable electronic settlements of trades to take place.

Access to the Demat account requires an internet password and a transaction password
as well as initiating and confirming transfers or purchases of securities. Purchases and
sales of securities on the Demat account are automatically made once transactions are
executed and completed.

Advantages of Demat A/C

The Demat account reduces brokerage charges, makes pledging/hypothecation of

shares easier, enables quick ownership of securities on settlement resulting in
increased liquidity, avoids confusion in the ownership title of securities, and provides
easy receipt of public issue allotments.

It also helps you avoid bad deliveries caused by signature mismatch, postal delays and
loss of certificates in transit. Further, it eliminates risks associated with forgery,
counterfeiting and loss due to fire, theft or mutilation. Demat account holders can also
avoid stamp duty (as against 0.5 per cent payable on physical shares), avoid filling up
of transfer deeds, and obtain quick receipt of such benefits as stock splits and bonuses.

The benefits are enumerated as follows:

 It’s a safe and convenient way to hold securities

 Immediate transfer of securities is there
 There is no stamp duty on transfer of securities
 Elimination of risks associated with physical certificates such as bad delivery,
fake securities, delays, thefts etc
 There is a major reduction in paperwork involved in transfer of securities,
reduction in transaction cost etc
 No odd lot problem, even one share can be sold thus there is an advantage
 Change in address recorded with DP gets registered with all companies in
which investor holds securities electronically eliminating the need to
correspond with each of them separately;
 Transmission of securities is done by DP eliminating correspondence with
companies;
 Holding investments in equity and debt instruments in a single account.
Benefit to the Company

The depository system helps in reducing the cost of new issues due to less printing
and distribution cost. It increases the efficiency of the registrars and transfer agents
and the Secretarial Department of the company. It provides better facilities for
communication and timely services with shareholders, investor etc.

Benefit to the Investor The depository system reduces risks involved in holding
physical certificated, e.g., loss, theft, mutilation, forgery, etc.It ensures transfer
settlements and reduces delay in registration of shares. It ensures faster
communication to investors. It helps avoid bad delivery problem due to signature
differences, etc.It ensures faster payment on sale of shares. No stamp duty is paid on
transfer of shares. It provides more acceptability and liquidity of securities.

Benefit to Brokers The depository system reduces risk of delayed settlement. It

ensures greater profit due to increase in volume of trading. It eliminates chances of
forgery – bad delivery. It increases overall of trading and profitability. It increases
confidence in investors.

Disadvantages of Demat

The disadvantages of dematerialization of securities can be summarised as follows:

 Trading in securities may become uncontrolled in case of dematerialized

securities.

 It is incumbent upon the capital market regulator to keep a close watch on the
trading in dematerialized securities and see to it that trading does not act as a
detriment to investors.

 The role of key market players in case of dematerialized securities, such as

stock-brokers, needs to be supervised as they have the capability of
manipulating the market.

 Multiple regulatory frameworks have to be confirmed to, including the

Depositories Act, Regulations and the various By-Laws of various depositories.

 Additionally, agreements are entered at various levels in the process of

dematerialization. These may cause anxiety to the investor desirous of
simplicity in terms of transactions in dematerialized securities.

 However, the advantages of dematerialization outweigh its disadvantages and

the changes ushered in by SEBI and the Central Government in terms of
compulsory dematerialization of securities is important for developing the
 securities market to a degree of advancement. Freely traded securities are an
essential component of such an advanced market and dematerialization
addresses such issues and is a step towards the advancement of the market.

Indian Market Scenario

Indian capital market has seen unprecedented boom in its activity in the last 15 years
in terms of number of stock exchanges, listed companies, trade volumes, market
intermediaries, investor population, etc. However, this surge in activity has brought
with it numerous problems that threaten the very survival of the capital markets in the
long run, most of which are due to the large volume of paper work involved and paper
based trading, clearing and settlement. Until the late eighties, the common man kept
away from capital market and thus the quantum of funds mobilized through the
market was meager. A major problem, however, continued to plague the market. The
Indian markets were drowned in shares in the form of paper and hence it was
problematic to handle them. Fake and stolen shares, fake signatures and signature
mismatch, duplication and mutilation of shares, transfer problems, etc. The investors
were scared and were under compensated for the risk borne by them. The century old
system of trading and settlement requires handling of huge volumes of paper work.
This has made the investors, both retail and institutional, wary of entering the capital
market. However, lack of modernization become a hindrance to growth and resulted in
creation of cumbersome procedures and paper work. However, the real growth and
change occurred from mid-eighties in the wake of liberalization initiatives of the
Government. The reforms in the financial sector were envisaged in the banking sector,
capital market, securities market regulation, mutual funds, foreign investments and
Government control. These institutions and stock exchanges experienced that the
certificates are the main cause of investors` disputes and arbitration cases. Since the
paper work was not matching the rapid growth so there was a need for a better system
to ensure removal of these impediments. Government of India decided to set up a fully
automated and high technology based model exchange that could offer screen-based
trading and depositories as the ultimate answer to all such reforms and eliminate
various bottlenecks in the capital market, particularly, the clearing and settlement
system in stock exchanges. A depository in very simple terms is a pool of pre-verified
shares held in electronic mode which offers settlement of transactions in an efficient
and effective way.

Major players in D-mat Account

 Sharekhan

 India Bulls

 HDFC ltd.

 ICICI securities ltd

  Kotak Securities ltd.

 Motilal Oswal Securities ltd

 Anagram Securities.

 All commercial banks.

Objective of Our Study.

1. To find out the awareness about DEMAT A/C among the investors.

2. To find out the point of view of investors regarding the services provided by
the brokers.

Limitation of Study

 The survey has been done with very stipulated time.

 The study involves only 100 employed investors, which may not represent the
whole population. So we cannot give a generalised statement.

Data collection method

 Questionnaires were distributed physically and online.

 Personal interviews, telephonic interviews, online interviews were conducted to

collect the data.

Survey report
Table showing classification among the investors:

Attributes No. of person Percentage

Male 78 78%
Female 22 22%
 percentage classification among the investors

Female
22%

Male
78%

Interpretation

Out of the total sample size of 100, 78% was male investors and 22% is female
investors.

Table showing age wise classification of Investors:

Age group No. of persons percentage

20-25 08 8%
25-30 36 36%
30-35 17 17%
35-40 12 12%
40-45 09 9%
45-50 08 8%
50-55 04 4%
55-60 06 6%
 Age wise classification of Investors
40

35

30

25 Age wise classification of

Investors
20

15

10

0
20-25 25-30 30-35 35-40 40-45 45-50

Interpretation

The survey shows that majority of surveyed people are in the age group of 25-30 and 30-
35.wso we can say that the people between the age group of 25-40 are the most aware of the
demat A/c.

Classification of investors on the basis of income

Attributes No. of persons Percentage

Less than 2.5 lakhs 16 16%
2.5lakhs-5 lakhs 24 24%
5lakhs-7.5 lakhs 37 37%
More than 7.5 lakhs 23 23%

Percentage classification of investors on the basis of

income
lessthan 2.5
more than 7.5 lakhs
lakhs 16%
23%
2.5lakhs-5 lakhs
24%

5lakhs-7.5 lakhs
37%
Interpretation:

According to our survey 16% earns less than 2.5 lakhs, 24% earns 2.5lakh -5 lakhs and 60%
earns more than 5 lakhs. So we can say that majority of the investors belong to the higher
income bracket, with considerable amount of savings set aside for investment purpose.

Table shows investment portfolio the investors are interested in:

Attributes No. of persons Percentage

Bond / Debenture 0 0
Mutual fund 10 10%
Real estate 12 12%
Equity shares 38 38%
LIC 30 30%
Precious objects 10 10%

investment patters of the investors

10% 10%

mutual fund
12% LIC
equity shares
real estate
30%
precious object

38%

Interpretation:

Majority of the investors are keen to invest in the stock market and the figure is 38% apart
from equity share the investors like to invest in LIC polices due to tax benefit, mutual fund
and some precious object is coming afterwards due to some female investors and some risk
averse people. But if the investment opportunity is giving higher return then the investors are
keen to invest.

Table showing who influence the investors while investigating:

Attributes No. of persons Percentage

Own decision 48 48%
Broker 12 12%
Personal banker 4 4%
Friends and relative 28 28%
Parents 8 8%
 investment decision
60

50

40

30
investment decision
20

10

0
on er er ve ts
cisi r ok ank le ati r en
de b
al
b
s/
r pa
n
Ow son ien
d
r fr
pe

Interpretation

From our survey that most of the people are take their investment decision by himself
and and they hardly influence by the broker but friend and relative has an impact on
the investment decision.

Table showing the persons having demat A/c

Attributes No. of persons Percentage

Persons having d-mat A/c 38 38%
Persons not having d-mat A/c 62 62%

Interpretation

Among 100- customer we survey, 38% investors are having DEMAT A/C and rest
62% do not have a DEMAT A/C.

Chart showing percentage classification of DP in which investors have

DEMAT A/c
 percentage classification of DP in which
investors have DEMAT A/c
5.34 21 icici direct
15.78 kotak securities
hdfe
sharekhan
anagram
18.42 commercial banks
23.68
15.78

Interpretation

According to our survey, most of the investors are having d-mat a/c with the well
known brokers rather than commercial banks. Among them sharekhan is having
23.68% and icici direct is having 21% of share as per our survey.

Table showing most appealing feature In the DP among the investors

Attributes No. of persons Percentage

Quality of services 28 73.68%
Brokerage services 3 7.89%
Demo’s and assistance 4 10.63%
Periodic statements 3 7.89%
 Percentageshowing most appealing feature I n the DP
among the investors
7.89

10.63 QUALITY OF SERVICES

BROKARAGE SERVICES
ASSISTANCE
7.89 PERIODIC STATEMENTS

73.68

Interpretation

From the table we can conclude that the investors are want quality services from the
broker. Rather than minimising the brokerage fees the quality services should be improved
because maximum investors (around 74%) needs quality services.

Table showing the investors perception regarding the best source of information
on Demat a/c.

Attributes No. of persons Percentage

Television 56 56%
Radio 4 4%
Internet 28 28%
Mobile Advertisement 4 4%
Others 8 8%
 Preferred source of Information
4% 8%
Television
Radio
Internet
Mobile Advertisement
28%
56% Others

4%

Interpretation

The analysis shows that 56% of the investors consider tv as the most source of
information regarding demat account. This is followed by internet 28%.4% of
investor’s preferred mobile advertisement and radio as information media.

Table showing investor’s opinion on the brokerage paid in terms of online

trading and other investment options:

Attributes No. of persons Percentage

Brokerage paid is higher 4 4%
Brokerage paid in lower 32 32%
Can’t say 64 64%

Investors Opinion
Brokerage paid is higher Brokerage paid in lower
Can’t say
4%

32% The analysis shows

that 64% are not sure
64% about the brokerage
charges involved in
online trading.32% of
the investors consider
the brokerage fees to be lower compared to other investment options, and the last 4%
consider it to be higher than other option.

Table showing whether the investor is ready to pay a premium charge to open a demat account
 Attributes No. of persons Percentage
Yes 16 16%
No 84 84%

Preferred source

Yes
16%

No
84%

Interpretation

The study reveals that 84% of the investors are not ready to pay a premium charge to
open a Demat account. Only 16% of the investors are willing to pay a charge to open
Demat account.

FINDINGS, SUGGESTIONS AND CONCLUSIONS

FINDINGS

1) The awareness levels among investors regarding Demat a/c and related
services are moderate.
2) There is huge potential in Demat A/C in India. The market penetration is
very low.
3) Despite the economy facing recession and its impact on stock market
equity shares, seems to be most preferred investment alternative among
individuals.
 4) Online trading gives the impression of being the service dominantly used
by employed male individuals. Precious object like gold, jewellery, are the
most proffered investment by the female investors.
5) The brand visibility of financial institutions providing online trading and
Demat services are very low.
6) Quality services are the most influential aspect for broking agency that
appeals the investors.
7) Television and internet are the most important sources of information for
the investors regarding the Demat A/C

SUGGESTIONS

1) The SEBI must reduce the statutory norms/ requirements to open a Demat a/c in
order to make it more accessible, understandable and hassle free.
2) Introduction of more private players can help to increase the awareness levels
regarding Demat a/c
3) The demos provided by banks/brokerage agencies should be increased as the
current levels , should educate the customers adequately.
4) Target the new hidden customers, for whom the net can bring out convenience
and comfort like NRI, women, young executives and professionals.

CONCLUSIONS

1) Many broking firms make the process of opening a Demat a/c a cumbersome
one by making numerous enquiries about the customers as the process needs
it
2) The charges involved in opening a d-mat a/c are soaring, even the other
associated charges like, transaction charge, pledge charge, statement charges
are very high.
3) It is also highly influenced by economic factors like recession, slowdown etc
which can have a drastic impact on the investors.

QUESTIONAIRE

1) Name-

Age-
 Sex-

Occupation-

Contact Details-

2) In which income slab you will place yourself?

( ) Less than 2.5lakh ( ) 2.5lakh-5lakh ( ) 5lakh-8lakh ( ) 8lakh above

3) What type of investment portfolio you are looking for?

( ) Bonds /Debentures ( ) Mutual funds ( ) Real Estate ( ) Equity shares ( ) LIC

4) Who influences your investment pattern?

( ) Personal choice ( ) Broker/ agent ( ) Friends ( ) Parents

5) Are you aware of Demat A/C?

( ) Yes ( ) No

6) If yes then from where do you have your Demat A/C?

( ) Kotak securities ( ) ICICI DIRECT ( ) Motilal oswal ( ) Sharekhan

( ) other commercial banks

7) Which feature of the bank/ broker agency appeals you?

( ) Quality of service ( ) Brokerage charges ( ) Periodic holding statements ( ) others

8) Which is the best source of information regarding Demat a/c?

( ) Television ( ) Internet ( ) Radio ( ) Mobile advertisements

9) Is the brokerage paid in terms of online share trading is higher in comparison to the other
investment options?

( ) Yes ( ) No ( ) Cant’ say

10) Are you ready to pay a premium charge to open a Demat a/c?

( ) Yes ( ) No