What is Depository?

A depository is a system where securities like shares, debentures, bonds, government securities, mutual fund units, etc. of an investor are held in electronic form. A depository can be compared to a bank. An investor has to open an account with the Depository through a depository participant, just as he opens an account with the bank. In India, there are two Depositories, namely Central Depository Services Ltd. (CDSL) and National Securities Depository Ltd. (NSDL).