The SEBI on Friday raised the threshold for a basic service demat account (BSDA) fivefold 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 has been enhanced to ₹10 lakh, effective September 1.

If the value of the demat accounts is less than ₹4 lakh, account maintenance charges will be nil. At present, those holding up to ₹1 lakh in debt securities and ₹50,000 in other-than-debt securities are not charged anything currently. Those holding between ₹4 lakh and ₹10 lakh may be charged ₹100.

Financial inclusion

Electronic statements will be provided free of cost. Physical statement may be charged at a fee not exceeding ₹25 per statement.

BSDA is for an individual who has only one demat account where s/he is the sole or first holder. The individual can have only one BSDA in his/her name across all depositories.

The value of the holdings will be determined by depository participants based on daily closing price or NAV of the securities or units of mutual funds. Where such price is not available, the last traded price may be taken into account and for unlisted securities other than units of mutual funds, face value may be taken in to account. The value of suspended securities may not be considered for determining eligibility.

“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 had said in an earlier note.

BSDA was introduced in 2012 to promote financial inclusion.

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