What is Dematerialization (Conversion of physical share certificates into digital form)?
Dematerialization is the process of converting physical share certificates and assets to digital mode. So, if you want to dematerialize your mutual fund units, share certificates, government assets, and so on, create a demat account. By relinquishing your physical share certificatesl entities, you can obtain electronic shares in the demat account after it is created. To create a demat account, you must first choose a depository participant (DP) that can handle all of your shares other than physical share certificates and securities in electronic form. Depository services, like any other financial service, are obtained through DP. Any financial institution, such as a bank, stockbroker, or financial organisation, can act as a DP if they adhere to SEBI's guidelines. There are now two depositories in India: Central Depository Services India Limited (CDSL) and National Securities Depository Limited (NSDL) (NSDL). Both of these depositories register with the Securities and Exchange Board of India (SEBI).