Banks and broking companies forced to hard-sell demat accounts due to lack of business

The number of demat accounts with the country's two leading depositories, NSDL and CDSL, has grown substantially, despite unfavourable market conditions in the current year. Driving the growth are banks and broking firms which have been offering a free demat account facility to existing clients and prospective investors as part of their marketing efforts. Higher number of accounts, however, has not led to any improvement in participation of retail investors, as most of them continue to shy away from trading amid concerns over uncertain market conditions, according to brokers. As a result, many demat accounts are lying inactive continuously for the past many months. Since January this year, NSDL, the largest among the two depository services providers, has added 4 lakh new accounts, taking its tally to 1.17 crore at the end of June.

Source : Economic Times