The SEBI on Wednesday proposed to raise the threshold for a basic service demat account (BSDA) five-fold to achieve wider financial inclusion and reduce the cost of maintaining securities in demat accounts for retail investors. At present, an individual can hold debt and other securities worth up to ₹2 lakh in a single demat account to be eligible for BSDA. This may be enhanced to ₹10 lakh.
The regulator is also reviewing the account maintenance charges for BSDA and the services provided through it. Accounts that hold up to ₹1 lakh in debt securities and ₹50,000 in other-than-debt securities are not charged anything currently. This limit may be revised to ₹4 lakh. Those holding between ₹4 lakh and ₹10 lakh may be charged ₹100. “The facility for BSDA has been reviewed keeping in view the growth of benchmark indices in the previous decade and to further enhance the participation of retail investors in the securities market including participation of investors holding securities in physical form,” the regulator said in a note.
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BSDA was introduced in 2012 to promote financial inclusion. BSDA is for an individual who has or proposes to have only one demat account where she/he is the sole or first holder. The individual has only one BSDA in his/her name across all depositories.
The value of holding shall be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds, as the case may be. Where such price is not available, the last traded price may be taken into account.
Electronic statements for BSDA are to be provided free of cost. Physical statement may be charged at a fee not exceeding ₹25 per statement.
Enhancing BSDA is among a series of steps that the regulator is taking towards financial inclusion. Last year the SEBI chief said it was working with mutual fund houses to make ₹250 SIP viable for the industry.