Professional Documents
Culture Documents
EXECUTIVE SUMMARY
Karvy, the FINAPOLIS Ltd. is a stock Broking Company that deals in shares. Apart from security broking Karvy is in to Demat services, Mutual fund and Insurance services. It offers a wide range of financial services in order to meet different individuals financial planning. The project emphasizes on Customer satisfaction towards depository participants
Sample size: 100 customers of Karvy Stock Broking Ltd. Area Covered for research: Only Dharwad KARVY customers.
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FINDINGS:
1) I have carried out this exercise on Dematerlisation. So in my studies I have tried to see whether the customer have satisfied the service given by depository participants. 2) I have also seen that awareness of KARVY service given by Karvy finical consultant is from friends. 3) It is also seen that more than 84% of the respondent have satisfied with the service of demat. 4) It is also seen that more than 55% to 60% of the respondent has satisfied with the service of Freezing/ Defreezing and loan against share. Also 40% respondents are not aware about these services. 5) Also found that nearly 2% of the respondents are dissatisfied with bill Acceptance. 6) 5% improper format of Holding/Transaction statement and 4% Frequently reminders are given to karvy consultant ltd., for update the information Are Dissatisfied. 7). 38% of respondent feel tariff structure of Karvy Stock Broking Ltd charged is high and very high. 8) Also found that 53% respondent have satisfied 80% of the service
9). 35% of respondent prefer Karvy Stock Broking Ltd DP to Other Dp because Of Quality service And, 40% for safety service.
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INTRODUCTION
India has two hundred years old tradition in Securities. Infact that first India stock exchange established in Bombay is the oldest in Asia. The earliest security dealings were Transactions in loan securities of East India Company, the dominant institution of those days. Corporate Shares came into the picture by 1830s and assumed significance with the Companies Act of 1956. In 1887 the broker community gave birth to the Native share and stock brokers Association which is now known as the Bombay Stock Exchange. The Indian Capital grew at a very moderate rate from 1951 to 1980. However it registered an impressive growth in 1980s. the process of liberalization and the transparency in operation has raised the interest of foreign investors in India. Till 1978 there were only 8 recognized exchanges in India. Initially the exchange operated on an outcry system i.e. manual system of trading Due to increase in the trading volumes, the number of issuer increased substantially, and the birth of NSES highly transparent automated system come into existence Even then there was an increase in paper work causing a gridlock at every stage in the stock market This delays the clearance and settlement of traders, registration of securities in the shareholder name and due this it increased the back office paper work intermediaries These outdated systems have increased settlement risks and have rendered the implementation of a delivery of a versus payment system impossible. National Stock Exchange of India Limited to provide electronic depository facilities for securities traded in the equity and the debt market. NSDL commenced its operations in the year 1996 and is the first depository in India.
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Statement of the Problem: KARVY STOCK BROKING Ltd is providing the Demat service. Hence in this report an attempt is made to know the present customer satisfaction towards depository participants. RESEARCH OBJECTIVES: To know the function of DP. To know the percentage of have satisfied the service of DP. To know how demat account is helping in the trading To know the exception of the customer.
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Sampling since segment wise investors in KARVY STOCK BROKING Ltd were available the overall customers were considered for the study. Hundred Percent coveraged. Hence random sampling survey method was adopted for the purpose of the study.
Sampling Size: A sample of 100 was chosen for the purpose of the study. Sample consisted of small investor, large investors and traders of KARVY STOCK BROKING Ltd.
Sampling Procedure: From large number of customer of KARVY STOCK BROKING Ltd. Were randomly selected from the available customer database.
MEASUREMENT TECHNIQUE:
For this purpose measurement technique used for survey is
ANALYTICAL TECHNIQUE:
Statistical technique used for measuring the response is in terms of percentage.
Since Sample size is only 100 all Hundred customers are approached . Since segment wise investor is available in KARVY STOCK BROKING Ltd. Overall concept is taken for the study.
Information is partly based on secondary data and hence the authenticity of the study can be visualized and is measurable.
Level of accuracy of the results of research is restricted to the accuracy level with which the customers have given their answers and the accuracy level of the answers cannot be predicted.
BACKGROUND
Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. KARVY, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services,
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GROUP OF COMPANIES
KARVY SECURITY LTD
Deals in distribution of various investment products, viz, equities, Mutual fund, bounds debenture fixed deposits, insurance policies & other financial products Member Hyderabad stock Exchange (HSF)
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KARVY STOCK BROKING LTD. Deals in buying & selling equity shares & debenture &on the national stock exchange (NSE), the Hyderabad stock exchange & over the counter exchange of India (OTCEI) Member-national stock exchange (NSE)
KARVY CONSULTANTS LTD
Transfer agency services for corporate & mutual funds Registrar for IPO\book building Depositary participant services Registered with both NSDL/CDSL It enable services MT/call center /data classification Karvy .com comprehensive financial advisory site
KARVY INVESTER SERVICES LTD. Deals in issue management, investor banking & merchant banking
DEPOSITARY SEVICES Registered as DP both with NSDL & CDSL Serving over 2 lac investors Online connectivity at Hyderabad, Lucknow &Bangalore
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A Study of Customer Satisfaction towards Depository Participants Ranked among the top 5 DPS in the country High synergy with registry & broking activities for higher services
levels to the customer information Web based customer information Provision of service in over 75 locations
IT SERVICES GROUP 1. Medical transcription First strategic initiative into global processing Among the top MT companies in India
2.E-BUSINESS GROUP Strategic intent: to develop a comprehensive financial services portal which includes Investor servicing: depository clients. Distribution of financial products Net trading Insurance distribution 1. Call center 2. Started with a 30 agent e-call center mutual funds, corporate shareholders &
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MISSION
Our mission is to be a leading, preferred service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising and technology driven organization which will set the highest standards of service and business ethics.
QUALITY POLICY
To achieve and retain leadership, Karvy shall aim foe complete customers satisfaction, by combining its human and Technological resources, to provide superior quality financial Services. In the process, Karvy will strive to exceed Customers expectations.
QUALITY OBJECTIVES
As per the Quality Policy, Karvy will: 1. Build in- house process that will ensure transparent and
harmonious relationship with its clients and investors to provide high quality of services. 2. Establish a partner relationship with its investor service agents
and vendors that will help in keeping up its commitments to the customers. 3. Provide high quality of work life for all its employees and equip
them with adequate knowledge &skills so as to respond to customers need. 4. Continue to uphold the values of honesty & integrity and strive
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A Study of Customer Satisfaction towards Depository Participants 5. Use state of the art information technology in developing
new and innovative financial products and services to meet the changing needs of investors and clients. 6. Strive to be a reliable source of value-added financial products
and services and constantly guide the individuals and institutions in making a judicious choice of it. Strive to keep all stake- holders (shareholders, clients, investors and regulatory authorities) proud and satisfied.
Achievements
Among the top 5 stock brokers in India (4% of NSE volumes) India's No. 1 Registrar & Securities Transfer Agents Among the to top 3 Depository Participants Largest Network of Branches & Business Associates ISO 9002 certified operations by DNV Among top 10 Investment bankers Largest Distributor of Financial Products Adjudged as one of the top 50 IT uses in India by MIS Asia
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MILESTONE
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ORGANIZATION CHART
Managing Director Chief Managing Director
Vice-President Vice-President
Vice-President
Vice-President
Branch Manager
N number of Team Leaders N number of Executives
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INTRODUCTION
Dematerialization or "Demat" is a process whereby your securities like shares, debentures etc, are converted into electronic data and stored in computers by a Depository. Securities registered in your name are surrendered to depository participant (DP) and these are sent to the respective companies who will cancel them after "Dematerialization" and credit your depository account with the DP. The securities on Dematerialization appear as balances in your depository account. These balances are transferable like physical shares. If at a later date, you wish to have these "Demat" securities converted back into paper certificates, the Depose Depository functions like a securities bank, where the dematerialized physical securities are traded and held in custody. This facilitates faster, risk free and low cost settlement.
In order to dematerialize certificates; an investor will have to first open an account with a DP & then request for the dematerialization of certificate by filling up a dematerialization request form (DRF), which is available with DP & submitting the same along with the physical certificates. The investor has to ensure that before the certificate are handled over to the DP For demat, they are defaced by marking Surrendered for dematerialisation on the face of the certificates. Depository is much like a bank and perform many activities that are similar to a bank.
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A Study of Customer Satisfaction towards Depository Participants Just as one opens a bank account in order to avail of the services of a bank, an investor opens a depository account with a depository participant in order to avail of depository facilities.
Transacting the depository way has several advantages over the traditional system of transacting using share certificates. Some of the benefits are:
Trading in demat segment completely eliminates the risk of bad deliveries, which in turn eliminates all cost and wastage of time associated with follow up for rectification. This reduction in risk associated with bad delivery has lead to reduction in brokerage to the extent of 0.5% by quite a few brokerage firms.
In case of transfer of electronic shares, you save 0.5% in stamp duty. You also avoid the cost of courier/ notarization/ the need for further follow-up with your broker for shares returned for company objection
In case the certificates are lost in transit or when the share certificates become mutilated or misplaced, to obtain duplicate certificates, you may have to spend at least Rs500 for indemnity bond, newspaper advertisement etc, which can be completely eliminated in the demat form.
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You can also receive your bonuses and rights into your depository account as a direct credit, thus eliminating risk of loss in transit.
You can also expect a lower interest charge for loans taken against demat shares as compared to the interest for loan against physical shares. This could result in a saving of about 0.25% to 1.5%. Some banks have already announced this.
RBI has increased the limit of loans against dematerialized securities as collateral to Rs2mn per borrower as against Rs1mn per borrower in case of loans against physical securities.
RBI has also reduced the minimum margin to 25% for loans against dematerialized securities as against 50% for loans against physical securities.
In short the advantages of opening a demat account are Shorter settlements thereby enhancing liquidity No stamp duties on transfer of securities held in demat form. Elimination of risk associated with physical certificated such as bad delivery, fake securities. Reduction in handling large volume of paper; Nomination facility Transmission of securities (such as shares, debentures, bonds and units) is done by DP eliminating the need to correspond with each company separately.
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A Study of Customer Satisfaction towards Depository Participants Change of name, address, dividend mandate, registration of power of attorney, transmission etc. can be effected across companies held in demat form by a single instruction to the DP
Though under the Depositories Act, 1996, there is no compulsion and the investor can hold shares either in physical or in dematerialized form. But according to Sebis directive certain shares have to be traded compulsorily in dematerialized form where the seller cannot sell in physical form. However, after he has bought the shares the investor can ask for rematerialization of the shares. The Depository Account must be opened with a Depository Participant. NSDL interfaces with investor trough Depository Participants (DPS). A list of names and addresses of all Authorized DPs is available with the NSDL and CDSL and one can meet any of these DPs place and make a choice at your based on your comfort and convenience. Opening a depository account is as simple as opening a bank account. One can open a depository account with any DP. To open a Depository Account, you have to submit the duly filled in Account Opening form along with the following documents: Fill up the account opening form, which is available with the DP. Residential Proof - Copy of Ration Card, Passport, Driving License, Telephone Bill, Electricity Bill or Rental Agreement. Sign the DP-client agreement, which defines the rights and duties of the DP and the person wishing to open the account. Receive your client account number (client ID). 19
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A client can choose to open more than one account with same DP. In addition to this, he has a choice of opening accounts with more than one DP. However a broker can open just one Clearing Member account per card/ stock exchange for clearing purpose, but he can still open multiple beneficiary
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A Study of Customer Satisfaction towards Depository Participants accounts Beneficiary is the personal account wherein brokers can keep their personal holdings.
Account opening
Any investor who wishes to avail depository services must first open an account with a depository participant of NSDL The process of opening a Demat account is very similar to a bank account The investor can open an account with any depository participant of NSDL An investor may open an account with several DPs or he may open several account with single There are several DPs offering various depositary related services. Each DP is free to fix its own fee structure Investors have the freedom to choose a DP based on criteria like convenience , comfort has to enter into an agreement with the DP The form and contents of this agreement are specified by the business rules of NSLD Types of depositary account depends on the operation to be performed There are three types of Demat accounts which can be opened with a depositary participant viz (a) Beneficiary Account (b) Clearing member Accounts and (c) intermediary account
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Types of accounts
Intermediary Account
House
Non-House
A DP may be required to open three categories of accounts for client beneficiary account, clearing member account and intermediary account A beneficiary account is an ownership account The holder/s of securities in this type of account own those securities The clearing member account and intermediary account are transitory account The securities in these are held for commercial purpose only A clearing member account is opened by a broker or a clearing member for the purpose of settlement of trades An intermediary account can opened by a SEBI registered intermediary for the purpose of stock leading and borrowing
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BENEFICIARY ACCOUNT
This is an account opened by investor to hold their securities in dematerialized from with a depository and to carry out the transactions of sale purchase of such securities in book entry form through the depositary system A beneficiary account holder is legally entitled for all rights and liabilities attached to the securities held in that account Therefore, the account is called beneficial owner account a beneficial account can be in the name of individual, corporate, HUF, minor, bank, financial institution , trust etc or the broker himself for the purpose of his personal investments in demat form . The account is opened with a DP House account vs. non house account opened by a DP for the custody of and transactions in its own investment is referred to as a house account DPS Are required to open house accounts for their own investments to prevent co-mingling of asset with that of their clients Neither the depositories ACT nor the regulations made under the act lay down any specifications about who can open a beneficiary account since all beneficial owners are deemed to be member of a company (under section 41 (3) of the companies act) only those who are eligible to become members of a company act can open a beneficiary account with a depository Thus all legal entities with the exception of partnership firms can open an account in the depository system
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Documents for verification: For the purpose of verification, all investors have to
submit the following documents along with the prescribed account opening form
Proof of identity- a beneficiary account must be opened only after obtaining a proof of identity of the applicant The applicants signature and photograph must be authenticated by an existing account holder or by the applicant bank or after due verification made with the original of the applicants valid passport , voter id , driving license or PAN card with photograph and further
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1. Name of the holder 2. Date of birth (for individual accounts) 3. Occupation 4. Address & phone / fax number 5. Bank details like name of the bank, type of the account (current/savings), accounts number, branch address, MICR, etc 6. PAN number, if applicable 7. Details of nomination 8. Specimen signatures Beneficiary account- procedure for opening an account Investor have the choice of selecting a DP based on their convenience, comfort, service, levels, safety, reputation charges, etc they have flexibility to have more than one account with the same DP or any other DPS No minimum balance is required for opening a depository account Investor also have the freedom to close an account with one DP and open another one with any other DP The type of the account opening from to field by an investor and the list of documents required depend on the type of beneficiary account to be opened whether it is for NRIs or corporate or individual Further, the individual account
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A Study of Customer Satisfaction towards Depository Participants can be in a signal name or joint name clearing members and brokers have to open in a beneficiary account if they have to deal with their own holdings There are several client types in the depository system and different codes are allotted to them. These are listed below 1. Resident Ordinary HUF 2. Financial institutions Government sponsored FI State financial corporation Other 3. FIIS Mauritius based Others 4. NRI Repatriable Non-Repatriable Depository receipt 5. Body corporate Domestic company Overseas corporate body Repatriable Government company Central government
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A Study of Customer Satisfaction towards Depository Participants State government Co-operative body NBFC Non NBFC Broker Foreign bodies Group companies Others OCB-Nonrepatriable Depository receipt 6. CM (clearing member) 7. Foreign national national /depository receipt 8. Mutual fund depository receipt 9. Trust, Bank 10. Intermediary
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Pool Account Delivery Account Receipt Account Clearing Corporation (CC)/Clearing House (CH)
Clearing Account Pool Account Receipt Account
Delivery Account
Selling client
Buying Client
a) Pool Account: It has two roles in clearing of Securities, viz., before pay-in, the selling client of the clearing member transfers securities from his client Account to the Clearing Account. After receiving pay-out, the clearing member transfers securities from his Clearing Account to the account of the buying client. b) Delivery Account: The securities before pay-in, the securities move from the Pool Account To the Delivery Account. The movement will be automatic if clearing member has given such an undertaking to its
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A Study of Customer Satisfaction towards Depository Participants Clearing If the Clearing Corporation. It will be effected on the basis of instruction received from the Clearing house/ Clearing Corporation. If the clearing house/ Clearing Corporation has not taken such undertaking, the clearing member to its DP must submit a delivery instruction form. At the time of pay-in, NSDL flushes out the securities in the Delivery Account & transfers the same to the Clearing house/ Clearing Corporation. c) Receipt Account: On pay-out day, the Clearing house/ Clearing Corporation transfers securities to the Pool Account (to The extent of net receipt) through the Receipt Account. This account can be used to trace details of settlement-wise receipt of the clearing member.
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Physical
Rolling
Action Rolling
2000014
Delivery Pool Receipt
9000152
Delivery Pool Receipt
2000248
Delivery Pool Receipt
2000015
Delivery Pool Receipt
9000153
Delivery Pool Receipt
2000248
Delivery Pool Receipt
2000016
Delivery Pool Receipt
9000152
Delivery Pool Receipt
2000249
Delivery Pool Receipt
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MARKET TRANSFERS: Any trade, which is cleared & settled by the clearing
house/ Clearing Corporation of the stock exchange, is considered as a market trade in the depository. Consequently, the transfers routed through the clearing account. Typically, a market trade has the following legs of transactions.
a.
corporation for pay-in. (clearing house/clearing corporation) c. Receiving pay-out from the clearing house/clearing House/clearing Corporation to clearing
NSDL
A B
CH/CC
DP of Seller
DP of Sellers CM
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A Study of Customer Satisfaction towards Depository Participants Receiving securities for pay-in from clients (client to clearing member)
A selling client of a clearing member (broker) would transfer securities from his beneficial owner account to the clearing account of the clearing member for onwards delivery to the clearing house/clearing corporation. This transfer is effected by his DP on the basis of a delivery instruction provided by the selling client. A diagrammatic Illustration for securities received for pay-in from clients is depicted below:
Seller A AAAlle rA
Seller B
Seller C
Clearing Member
OFF MARKET TRANSFERS: Any trade, which is not cleared and settled
by the clearing house/clearing corporation of the stock exchange, is considered as an off-market trade in the depository. Consequently, the transfer is not routed through the clearing account. Such transfers take place directly between two beneficiary accounts. Both buyer and seller may open account either with the same DP or with different DPs. The buyer and seller will trade amongst themselves and later on will exchange money, i.e., settle funds amongst
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A Study of Customer Satisfaction towards Depository Participants themselves. The selling client would deliver securities from its beneficiary account to the beneficiary account of the buying client. This transfer is effected by the DP of the selling client on the basis of a delivery instruction provided by the selling clients. A diagrammatic illustration of the settlement of an off-market trade in depository is depicted below:
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Depository:
A Depository is a Company where the shares of an individual are held in the electronic form, at the request of the shareholder. This eliminates the physical form of holding. IDBI, UTI, SBI and NSE promoted the National Securities Depository Limited (NSDL). The Central Securities Depository Limited (CDSL) was promoted by BSE.
Your money may be held in the form of liquid cash at your home or may be deposited in a bank. The bank holds your funds in the electronic form and subsequently debits or credits the account. Depending on your issuance of cheques or deposit of cheques. The advantages of safety and convenience of dealing with a Bank overweigh the reasons for holding liquid cash in your home. Your financial assets such as Equity Shares may be compared to the above example. You may hold physical share certificates in your home and be exposed to the various risks of lack of safety, mutilation, loss etc. Alternatively, you may deposit your shares in an organization called a Depository, which holds your shares in the electronic form. You can dematerialize shares of only those companies that have signed agreement to dematerialize their shares with the depository. You cannot dematerialize shares if they are not in your name, i.e. shares held in street name (market deliveries) cannot be dematerialized. However, when you send shares to the registrar to be transferred to your name you can request that you want those shares in dematerialized form.
Karvy Consultants Ltd. has four DPMs as on date. They are: 1.Hyderabad-IN300394 35
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In India depositories are required to be registered with SEBI and are governed by the provision of the Depositories Act, 1996 and regulation and bylaws framed for depositories by the SEBI. The depositories work in a completely computerized environment with electronic linkages with the point of origination for the transactions that may cause the change in ownership of securities. A depository will be electrically linked with the Register of the members maintained by the company/registrar, clearing and settlement system in the stock exchanges, stock lending organization (if in existence), custodians of securities, depository participants and brokers.
Account Transfer: The depository gives effect to all transfers resulting from
the settlement of trade and other transactions between various beneficial owners by recording entries in the accounts of such beneficial owners.
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A Study of Customer Satisfaction towards Depository Participants Transfer and Registration: A transfer is the legal change of ownership of a security in the records of the issuer. For effecting a transfer, certain legal steps have to be taken like endorsement, execution of a transfer of security occurs merely by passing book entries in the records of the depositories, on the instructions of the beneficial owners. Corporate Actions: A depository may handle corporate actions in two ways. In the first case, it merely provides information to the issuer about the persons entitled to receive corporate benefits. In the other case, depository itself takes the responsibility of distribution of corporate benefits.
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A Study of Customer Satisfaction towards Depository Participants depository. To achieve this, depositories and the clearing system should be electronically linked.
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Depository Participant:
Depository Participant (DP) is an organisation that acts as an Agent of the Depository and interacts with the investor. A DP is responsible for maintaining your securities account and operating it only under your written instructions. The Depositories Acts mandates that investors can use Depository facilities only through DPs. The distribution channel and geographical spread of the DPs offices allows you to access the Depository at a low cost. DP can only access their own clients'
information. They cannot access the client information of any other DP. The information of your holdings in the account is completely confidential& it is similar to your account balance in a bank.
You can select your DP to open a demat account just like you select a bank for opening a savings account. Some of the important factors for selection of a DP can be: 1. Convenience - Proximity to your office/residence, business hours. 2. Comfort - Reputation of the DP, past association with the organisation, whether the DP is in a position to give the specific service you may need? 3. Cost - The service charges levied by DP and the service standards.
Individual accounts can be opened by Ordinary Resident, HUF, NRI Repatriable and NRI Non-Repatriable. Body Corporate, Banks, Trusts, Financial Institutions, Foreign Institutional Investors, and Overseas Commercial Banks etc can open corporate Accounts. An account can be opened in the name of HUF in a similar way to individual account and mentioning the account category as HUF. However,
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DP
2A
R & T Agent
2 3 4
NSDL
Steps:
1. Client/ investor submits the DRF (Demat Request Form) and Physical certificates to DP. DP checks whether the securities are available for demat. Client defaces the certificates by stamping Surrender for Dematerlisation. DP punches two holes on the name of the company and draws two parallel lines across the face of the certificate. 2. DP enters the demat request in his system to be sent to NSDL. DP dispatches the physical certificates along with the DRF to the R & T Agent. 3. NSDL records the details of the electronic request in the system and forwards the request to the R&T Agent.
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a. b.
DPs provide Dematerlisation request forms (DRF) to their clients. The client completes the DRF in all respect 7 submits to the DP along
with the security certificates to be dematerialized. c. The DP checks the DRF for validity, completeness and correctness. The
following points should be checked particularly: to DRF. The attached security certificates are marked (defaced) with the The security certificate sought to be dematerialized are attached
words surrendered for dematerialisation. This is a precautionary measure to prevent misuse of share certificates by anyone. The certificate are not mutilated or defaced in a manner affecting
any material information. The name of client on DRF and the certificates is exactly the
same as in the clients account in DPM. However, minor variations in the name (like abbreviated name, initials in the place of first name, middle name, minor name mistake in the name) may be permitted if it can be reasonably established that both names are of the same person. The permitted variations refer to initials not being spelt out fully or put prior to after the surname. In such cases, if the signature on the DRF matches the 41
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status, certificate numbers, distinctive numbers, number of certificates, total quantity of securities and lock-in statues are filled-in correctly. d. If the DRF & the accompanying security certificates are found in order,
the DP should accept the DRF and certificates. e. If DRF and the accompanying security certificates are not found in
order, the DP should return the DRF and certificates. f. The DP should enter the dematerialisation request in the DPM. DPM
generates a request number (DRN), which should be mentioned on DRF. g. An authorized person, other than one who entered the DRF details in the
DPM, should verify the details of DRN and release a request to NSDL. h. Once the DP has received the certificates defaced by investor, the DP
punches two holes on the name of the issuer or its R&T Agent for dematerialisation. DRF and enclosures have to be sent at the address to which physical certificate to be sent communicated by NSDL. The forwarding letter should refer to the allotted DRN and should refer to the allotted DRN and should Be sent within seven days of accepting it from the client. i. The issuer or its R&T Agent verify the DRF & the accompanying
certificate for validity, completeness and correctness. They also match the details with the intimation received from NSDL against the same DRN. j. In case DRF is not found in order, the issuer or its R&T Agent send an
objection memo to the DP, with or without DRF & security certificates depending upon the reason for rejection. k. DRFs & Certificate are sent back on the following grounds: 42
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If the certificate is fake If the certificate has been reported to be stolen If the duplicates of the original certificates sent for demat have already been issued
If the endorsements are forged If the securities are not in the name of the account holder as per DRF If the details of the certificates do not pertain to the R&T Agent If the signatures differ If there is any court order on the securities If the certificate are received after 15 days of the electronic request. m. The DP informs the client accordingly & requests removal of reasons for
objection. The DP removes these or provides additional information to the issuer or its R & T Agent within 15days of receiving the objection memo. n. The DP, if the client so requires, may generate a new dematerialisation
request & send the securities again to the issuer or R &T Agent. Precaution to be taken while processing DRF
Ensure account to have the same sequence of names of holders and name structure as printed on the physical certificate.
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Partly & fully paid-up shares Locked & free holding Holdings locked in for different reasons Locked in holdings having different release date Different ISINs of the company
ISIN to be entered by DP. All joint holders to sign DRF. Check DRF form with details on certificate.
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DEMAT PROCESS
The demat process requires defacing of securities which will make the security certificate undeliverable unless the demat formalities are completed. Therefore, the client should be assisted in ascertaining whether the securities in question are available for demineralisation. Clients should be helped in filling up the demat request properly. Demat rejection causes great inconvenience to the client. DP should attend to this area with care and caution. One of the important reasons for demat rejection is signature mismatch. Taking the following precaution can reduce this: If the client is aware that the signature with the company& signature of the client should be advised to the register the new signature. If the signature is slightly different, client should be advised to sign as per the signature that was recorded by the company and as recorded with the DP. Ensure dispatch of DRFs and certificate to R &T Agents within seven days. Client may be encouraged to use the Transfer-cum-demat facility if it is offered by the company. They should be made aware of the procedures of the scheme. In case of joint holdings, the clients should be informed about the availability of Transposition cum Demat facility.
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CLOSURE OF ACCOUNT:
Closure on Clients Request- A DP can close a depository account on receipt of an application in the prescribed format. The application should be made by the account. In case joint-holders. An account can be closed sought to be closed, the following steps are necessary.
a.
credit of the same account making the application for closure; or b. Transferring the balance to the credit of another
account opened by the same account holder(s) either with the same participant or with a different participant.
Before closing the account the DP should ensure that all pending transactions have been settled. The request for closure should be processed only after ensuring that there is no balance lying in the account.
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A Study of Customer Satisfaction towards Depository Participants closure of account. The process of closing account in such a case is the same that of client-initiated closure.
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SETTLEMENT
The settlement of trades in the stock exchanges is undertaken by the clearing corporation (CC)/ clearing house (CH) of the corresponding stock exchanges. While the settlement of dematerialized securities is effected through depository, the funds settlement is effected through the clearing banks. The clearing members directly with the CC/ CH settle the physical securities. Exclusive demat segment follows rolling settlement (T+5) cycle and the unified (erstwhile - physical) segment follows account period settlement cycle. In case of rolling settlement cycle, the account period is reduced to one day.
In case of settlement of trades done in exclusive demat segments, the pay-in and pay out of funds and securities are effected on the same day afternoon and evening (same day) thus reducing the blockage of funds and limiting exposure to the clearing corporation.
Settlement of funds is effected through the clearing banks and depository plays no role in this.
Settlement of securities is effected through NSDL depository system. Clearing and settlement of the regular market trades is effected through the clearing members of the clearing houses of respective stock exchanges. All trading members of stock exchanges are clearing members of clearing houses. In addition, for settlement of institutional trades, custodians are also allowed to act as clearing members.
Clearing members of clearing house, dealing in dematerialized securities are expected to open a clearing account with any DP for the purpose of settling 49
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If there is any short delivery at the time of pay-in of securities, these short positions are auctioned in the Demat segment as done in the Unified (erstwhilephysical) segment.
You can sell shares in any of the stock exchanges linked to a depository through a broker of your choice.
Give an instruction to your DP to debit your account and credit your broker's clearing member pool account. (this is a depository account used exclusively for settling transactions by a broker)
On the pay-in day, your broker gives instruction to his DP for delivery of the shares to clearing corporation of the relevant stock exchange.
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The broker receives payment from the clearing corporation You receive payment from your broker for the sale in the same manner you would receive payment for a sale in the physical mode.
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You can purchase shares in any of the stock exchanges connected to a depository through a broker of your choice and make a payment to your broker;
Your broker receives credit in his clearing account with his DP on the pay-out day;
Broker gives instructions to his DP to debit his clearing account and credit your account;
You instruct your DP for receiving credit into your depository account either through a specific receipt instruction or using the "standing instruction" facility.
In case you are not using the "standing instruction" facility then, your depository account is credited only if the instructions given by you and your broker match.
Other Services
Besides demat and trading Depositories also offer other services, these are: o Pledging/ hypothecation of dematerialized securities. o Electronic credit in public offerings of companies. o Receipt of non-cash corporate benefits such as bonus, rights in electronic form. o Stock lending and borrowing. o Transmission of securities.
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Both you (pledgor) as well as the lender (pledgee) must have depository accounts.
You must initiate the pledge by submitting the details of the securities to be pledged in a standard format (available with DPs).
The pledgee should confirm the request through his DP. Once this is done, your securities are pledged All commercial documentation between the pledgor and the pledgee are handled outside the depository system.
After you have repaid your loan, you can request for a closure of pledge by instructing your DP through a standard format. The pledgee on receiving the repayment as well as the request for closure of pledge will instruct his DP accordingly. Even the locked-in securities can be pledged, however they cannot be invoked before the lock-in release date. Even after the securities are pledged, the pledgor continues to remain the beneficiary holder of those securities and will receive benefits of a corporate action, if any.
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Initial Public Offerings: Credits for public offers can be directly received into
demat account. In the public issue application form of depository eligible companies, there will be a provision to indicate the manner in which securities should be allotted to the applicant. All you have to do is to mention your client account number and the name and identification number of your DP. Any allotment due to you will be credited into your account. If the applicant is allotted securities in dematerialized form, but the details regarding the beneficiary account are incomplete/ wrong, the person will get physical delivery of allotted securities. If securities were allotted in the dematerialized form, these would be credited to applicants account any day between allotment date and listing date, at the discretion of the company. The issuer company/ their R&T agent will forward the applicant the allotment advice giving the number of shares allotted in dematerialized form. Through this you can come to know that you have been allotted shares. An amendment to the company law requiring all future public issues above Rs100mn to compulsorily offer securities in dematerialized form is awaiting legislative approval. After this all the issues above Rs100mn will require investors to trade only in demat way.
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Receipt Of Cash/ Non-Cash Benefits: When any corporate event such as rights
or bonus or dividend is announced for a particular security, depository will give the details of all the clients having electronic holdings in that security as of the record date to the registrar. The registrar will then calculate the corporate benefits due to all the shareholders. The disbursement of cash benefits such as dividend/ interest will be done directly by the registrar. In case of non-cash benefits, depository will directly credit the securities entitlements in the depository accounts of all those clients who have opted for electronic allotment based on the information provided by the registrar. The bonus/ rights issue against holding in dematerialized form can be either in the physical/ dematerialized form as per the choice of the investor. If no choice is given, by default, the securities will be issued in the physical form. Even if an investor has holdings in physical form, he can receive the bonus/ rights issue against this in the dematerialized form. In case of fractional part, as in the physical segment, it would be paid in cash and the remaining whole part would be credited to the investors account. 55
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A DP can be operational only after registration by Sebi, which is based on the recommendation from NSDL and Sebis own independent evaluation. Sebi has prescribed criteria for becoming a DP in the regulations.
DPs are allowed to effect any debit and credit to an account only on the basis of valid instruction from the client.
Every day, there is a system driven mandatory reconciliation between the DP and NSDL.
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There are periodic inspections into the activities of both DP and R&T agent by NSDL. This also includes records based on which the debit/ credit are effected.
The data interchange between NSDL and its business partners is protected by standard protection measures such as encryption. This is a SEBI requirement.
There are no direct communication links between two business partners and all communications between two business partners are routed through NSDL
All investors have a right to receive their statement of accounts periodically from the DP.
Every month NSDL forwards statement of accounts to a random sample of investors as a counter check.
In the depository, the depository holds the investor holdings on trust. Therefore, if the DP goes bankrupt the creditors of the DP will have no access to the holdings in the name of the clients of the DP. These investors can then either dematerialize their holdings or transfer them to a different account held with another DP.
Investor grievance: All grievances of the investors are to be resolved by the concerned DP. If they fail to do so the investor has the right to approach NSDL.
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Insurance Cover: NSDL has taken a comprehensive insurance policy to protect the interest of the investors in cases of failure of the DP to resolve a genuine loss. The details of the policy is as under:
Upper limit per claim: Rs200mn. Number of claims allowed: unlimited Minimum value of the claim: Rs150, 000 To cover claims valued less than Rs150, 000 NSDL has an investor protection fund in place.
Besides all these safety measures efforts have been done to make this electronic system foolproof.
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100 50 0
Series1
The sample size selected for the survey was 100.(Hundred) customers of KARVY CONSLUTANT STOCK BROKING were available for survey. So opinion was taken to know the customer satisfactions towards demat account.
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1.Respondent came to know the about KARVY FINANCIAL CONSULTANT Total no. Of sample taken: 100
1 Friends 47 2 News Papers/ Business Magazines 18 3 Online 10 4 Agent/Financial 14 5 Others 11
11%
Friends
18%
The above table and chart shows the respondents know KARVY FINANCIAL CONSULTANT : 47.00% of respondent know KARVY FINANCIAL CONSULTANT through their Friends. 18% of of respondent know KARVY FINANCIAL CONSULTANT through News Papers & Magazine. 14% of respondent know KARVY FINANCIAL CONSULTANT through Agents & Financial Institutions. 11% of respondent know KARVY FINANCIAL CONSULTANT through Others.
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Yes 94
No 6
No 6%
Yes No
Yes 94%
The above table and chart shows that 94% of respondents are interested to visit KARVY FINANCIAL CONSULTANT & only 6% of Respondent are not interested to visit the same .
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3. They Respondents are interested to visit KARVY FINANCIAL CONSULTANT because of visual pleasure, hospitality & Excellent Guideline etc
Agree 47
Just agree 45
No Opinion 8
Just Disagree 0
Disagree 0
50 40 30 20 10 0
47
45
The above table and chart shows that 47% of Respondents are interested to visit KARVY FINANCIAL CONSULTANT , 45% of Respondent just agree & 8% of Respondent are not interest to give there opinion .
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Agree 69
Just agree 24
No Opinion 7
Just Disagree 0
Disagree 0
69
24 7
No Opinion
Disagree
The above table and chart shows that 69% of Respondents are interested to visit KARVY FINANCIAL CONSULTANT Because of there attitude, and, 24% of Respondent just agree only 7% of Respondent are constant.
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A Study of Customer Satisfaction towards Depository Participants 5. They Respondents are definitely using service of KARVY FINACIAL CONSULTANT because what they benefit gets from them.
Agree 50
Just agree 41
No Opinion 8
Just Disagree 1
Disagree 0
50
41 8
No Opinion
1
Just Disagree
0
Disagree
The above table and chart shows that 50% of Respondents are interested to visit KARVY FINANCIAL CONSULTANT because they get that much of benefits from them , and, 41% of Respondent just agree only 8% of Respondent constant..1% of Respondent just disagrees.
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6 They
Respondents
are
interested
KARVY
FINANCIAL
Yes 86
No 14
No 14%
Yes No
Yes 86%
Source: Survey Data The above table and chart shows that 86% of respondents are interested to use service of KARVY FINANCIAL CONSULTANT because they introduce new scheme and we get benefit & only 14% of Respondent are not interested to visit the same.
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7 They Respondents use KARVY FINANCIAL CONSULTANT because Karvy People know customer value and money value.
Agree 54
Just agree 39
No Opinion 6
Just Disagree 1
Disagree 0
Agree
Just agree
No Opinion
Just Disagree
Disagree
The above table and chart shows that 54% of respondents are satisfied with the service of KARVY FINANCIAL CONSULTANT because the Karvy People know customer value and money value. 39% Respondents just agree .6% of parole say no opinion and only 1% of Respondent say just disagree.
8. They Respondents specify KARVY FINANCIAL CONSULTANT better then other Dp.
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Agree 41
Just agree 37
No Opinion 20
Just Disagree 1
Disagree 1
45 40 35 30 25 20 15 10 5 0
41 37 Agree Just agree 20 No Opinion Just Disagree Disagree 1 Agree Just agree No Opinion Just Disagree 1 Disagree
Source: Survey Data The above chart shows that 41% of respondents are interested in KARVY FINANCIAL CONSULTANT because of their best service which is better then other DP services. 41% of Respondents agree.31% of Respondents just agreed. 20 % of Respondent has not given their opinion. Only 1% of Respondent disagrees.
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9. Demat
Extremely satisfied 38 Satisfied 46 Neither satisfied/ nor unsatisfied 16 Unsatisfied 0 Extremely unsatisfied 0
38
46 16
0
Extremely satisfied Satisfied Neither satisfied/nor unsatisfied unsatisfied
0
Extremely unsatisfied
S1
Source: Survey Data The above table and chart shows demat services offered by KARVY FINANCIAL CONSULTANTS are satisfied. 38% of the Respondents are
extremely satisfied, 46% just Satisfied, 16%of of Respondents neither satisfied / Unsatisfied..
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Satisfied 49
49
20 10 0
Extremely satisfied Satisfied Neither satisfied/nor unsatisfied
25
26 0
unsatisfied
Extremely unsatisfied
0
Extremely unsatisfied
The above table and chart shows that 25% of the respondents are extremely satisfied by the service of Karvy, 49% of respondents are satisfied and 26% of the respondents are having neutral opinion about the service provided by the Institution.
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c. Freezing/Defreezing
Extremely Satisfied 6
Satisfied 49
Unsatisfied 0
Extremely unsatisfied 0
Extremely unsatisfied
0 0 1 6 45 49
unsatisfied Neither satisfied/nor unsatisfied Satisfied Extremely satisfied
20
40
60
The above table and chart shows the services of freezing/ defreezing 49% of the respondent are aware and satisfied with these services. And 45% of respondent are having neutral opinion about freezing/ defreezing, 6% of respondent are dissatisfied with this service because they are dont have understood the core concept.
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Extremely satisfied 22
Satisfied 33
Unsatisfied 0
Extremely unsatisfied 0
0%
Extremely satisfied
22%
Satisfied Neither satisfied/nor unsatisfied unsatisfied
45%
33%
Extremely unsatisfied
The above table and chart shows most of the respondent are having neutral opinion i.e., 45% and 33% have satisfied this service. 22% of respondent are extremely satisfied.
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Extremely Satisfied 49
Satisfied 47
Unsatisfied 0
Extremely unsatisfied 0
49
47
4
Neither satisfied/nor unsatisfied
0
unsatisfied
0
Extremely unsatisfied
The above table and chart shows the service of share trading, 49% of the respondent have Extremely Satisfied with this service, and 47% of respondent are satisfied; In all we can say that 96% respondent have satisfied with the services of Share trading.
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Satisfied 44
Unsatisfied 0
60 50 40 30 20 10 0 Extremely satisfied
Satisfied unsatisfied
48
44 8
Satisfied Neither satisfied/nor unsatisfied
unsatisfied
Extremely unsatisfied
The above table and chart shows the services given by Karvy about Periodic statements 48% of the respondent are extremely satisfied & 44% of the respondent is satisfied .In all 92%(appr) of respondent have satisfied with this service.
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Satisfied 48
Unsatisfied 0
60 50 40 30 20 10 0
Extremely satisfied Satisfied
40
48 12
Neither satisfied/nor unsatisfied
unsatisfied
Extremely unsatisfied
Satisfied unsatisfied
Source: Survey Data The above table and chart shows the 48% of the respondent are satisfied with the Telephonic service; 40% of the respondent are mostly satisfied & in all 88% of the Respondent satisfied; 12% having neutral opinion.
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Extremely satisfied 60
Satisfied 35
unsatisfied 0
Extremely unsatisfied 0
70 60 50 40 30 20 10 0 60
35
5 0 0
Extremely satisfied
Satisfied
unsatisfied
Extremely unsatisfied
Satisfied unsatisfied
Source: Survey Data The above table and chart shows overall 60% of the respondent are extremely
satisfied with the co-operation by staff;
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Satisfied 32
Source: Survey Data The above table and chart shows overall 50% of the respondent are extremely satisfied; 32% of the respondents are satisfied &16% of the respondents are having neutral opinion.
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4 1 5 1 1 2
4% 1% 5% 1% 1% 2%
6 5 4 3 2 1 0 1 1 1 1 2 4 5 a b c d e f
Source: Survey Data The above table and chart shows that 5% of the respondents are unsatisfied with Improper attention given to the enquires . & 4% of the respondent are unsatisfied with frequently reminders are given to karvy consultant ltd., for update the information given by DP .So proper communication with the Respondent & update information is required.
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62 25 0
low
13
0
verylow
Source: Survey Data The above table and chart shows that 62% of the respondents think the tariff structure of the KARVY CONSULTANT is very reasonable.25% of the respondent thinks the tariff structure is high. 13% of the respondent feels the tariff structure is very high.
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62 25 13 0
low
0
verylow
Source: Survey Data The above table and chart shows that 53% of the respondent have satisfied 80% of service given by DP; 31% of the respondent have satisfied 60% of service and 11% of the respondent have satisfied 40% of the service. Only 5% of respondent have satisfied 100 of the service.
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Quality service 35
Rate Charged 14
Safety 40
Reach 1
35 14
Qulity service Rate Charged
40
10
Nothing in paricular Safety
1
Reach
Source: Survey Data The above table and chart shows that 40% of the respondents preferred this DP because of Safety & 35% of the respondents preferred this DP because of the quality service. In all 75% prefer KARVY CONSULTANT because of safety& quality.
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Recommendation
Customer service should be improved and more co-operation also provide. Time taken for transfer of script from trading account into demat account should be reduced. Statement copy should made more clear and figure should be mention in respective column. More space provide in trading place. The commission charged should be reduced. The office should be situated near bus stand or subhas road.
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CONCLUSION
Since it is service based industry, the customer plays vital role, so in order to satisfy the customer appoint more no of well qualified agents who can communicate respondents to improve the services, hence give more advertisement in News paper, local TV channel, to over come the over crowding and non availability of telephone links proper measure should be taken.
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QUESTIONNAIRE
Dear Sir/ Madam NAME ADDRESS : : ____________________________ ____________________________
I came to know about KARVY FINANCIAL CONSULTANTS from 4 1 2 3 5 Agent/Financial Friends News Papers Online Others Agency /Business Magazine I am interested in visiting KARVY FINANCIAL CONSULTANTS
2.
I have been using service of KARVY FINANCIAL CONSULTANTS because of the low cost, visual pleasure, Hospitality, Communication, and new concept of financial consultancy 1 Agree 2 Just Agree 3 No opinion
4 Just disagree
5 Disagree
4.
CONSULTANTS because of the attitude of the employees towards customers. 1 Agree 5. 2 Just Agree 3 No opinion
4 Just disagree
5 Disagree
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1 Agree 6.
2 Just Agree
3 No opinion
4 Just disagree
5 Disagree
the new scheme introduced frequently and benefit from such scheme 1) Yes 7. 2) No
customer value as well as money value of customers 1 Agree 8. 2 Just Agree 3 No opinion
4 Just disagree
5 Disagree
KARVY FINANCIAL CONSULTANTS service of dp are better then other dp services. 1 Agree 2 Just Agree 3 No opinion
4 Just disagree
5 Disagree
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A Study of Customer Satisfaction towards Depository Participants 9. Express your satisfaction level about the following scheme/service please tick. Extremely Satisfied Neither unsatisfie Extremely Satisfied satisfied/nor d Unsatisfied unsatisfied
Schemes/services
a. Demat b. Settlement (Selling/purchasing) c. Freezing/ defreezing Of an account d. Loan against shares e. Share trading f Periodic statements g. Telephone queries h. Co-operation by staff i. Bills Acceptance 10. If you have faced any when dealing through your DP or you are unsatisfied with the above mentioned services/schemes. Frequently reminders are given to KARVY FININCIAL CONSULTANTS., for update the information Irregular receipt of Holding/Transaction statement Improper attention given to the enquires Improper format of Holding/Transaction statement Billing problems Inadequate information Other specify___________________ 11. Please tick the following: 1 Very High 2 High 3 Reasonable 4 Low 5 Very Low
Tariff
Structure
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A Study of Customer Satisfaction towards Depository Participants 12. How do you rate the services of your DP 0% 20% 40% 60% 80% 100%
13. How do you justify your preference for your KARVY FINANCIAL CONSULTANTS DP over other DPs? 1 Quality Service 2 Rates Charged 3 Nothing in particular 4 Safety 5 Reach
14. A) Your age (Yrs) <25 B) Income (Pa) <60000 2.4 L 3.6L C) Education Up to Xth
26-35
36-45
46-60
> 60
Graduate
PhD.
Others.
______________________________________________ ______________________________________________
Thank you for your co-operation
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GLOSSARY
Account Freezing: The Depository Participant may freeze the account of a client maintained with him on written instructions received by the Participant in that regard from the client concerned in the form specified under the Business Rules.
Account Opening: Any person willing to avail the services offered by a Depository shall open an account with a Depository Participant.
Beneficiary: A person who benefits from a trust set up on his / her behalf & anyone who benefits from the proceeds of a will
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Defreezing of an account: The client can request his depository participant to release the suspension order and defreeze the account for regular operations. The Depository participant shall defreeze the account only after receipt of the application for defreezing signed by all the account holders
Delivery Instructions by client: In order to transfer securities from his account to another a beneficial account owner must give an instruction to his / her Depository Participant. A beneficial account owner must give instruction to his / her DP to transfer
DRN: When the securities are found in order with the details of the request as mentioned in the form, the depository participant enters the details in the DPM (Depository participant Module, provided by NSDL to the DP) a
Dematerialization Request Number (DRN) is generated by the system. The DRN so generated is entered in the space provided for the purpose in the
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A Study of Customer Satisfaction towards Depository Participants Dematerialization Request Form. The request is then released to DM (Depository Module Depositorys software system). The DM forwards the requests to the Issuer / R & T agent electronically. Once the DRN is confirmed or accepted by the Issuer / R & T agent the DM electronically authorize the creation of appropriate credit balances in the clients account. The DPM shall credit the clients account automatically.
Electronic Public Offering (EPO): An initial public offering, or new issue of shares, in which the process of applying for shares is handled electronically (via websites). Freezing of an account: Any client can give instructions, in the prescribed form, to his Depository Participant to freeze his account either for debit or for all operations. Only after receipt of the application for freezing the account signed by all the account holders the Depository Participant shall freeze the account till further notice received from the client in this regard. Fungible: Dematerialized shares do not have any distinctive numbers or certificate numbers. These shares are fungible which means that 100 shares of a security are the same as any other 100 shares of that security. Hypothecation: The pledging of securities as collateral. A client having a beneficiary account with a DP can hypothecate securities in electronic form against loan / credit facilities extended by a pledge, who has a beneficiary account with a DP. The creation of pledge / hypothecation will be initiated by the pledgor through its DP and the pledgee will instruct its DP to confirm the creation of the pledge. The pledge / hypothecation so created can either be closed on repayment of loan or invoked on 95
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BIBLIOGRAPHY
Web sites
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