National Securities Depository Limited (NSDL) is a central Indian securities deposit based in Mumbai. It was established on 8 November 1996 as the first electronic securities deposit in India with national coverage based on a suggestion from a national institution responsible for India's economic development. Although India had a vibrant capital market that is more than a century old, paper-based settlement of trades caused substantial problems such as poor delivery and delayed transfer of securities. The enactment of the Depositary Law in August 1996 paved the way for the establishment of the National Securities Depository Limited (NSDL), the first deposit in India. It continued to establish an infrastructure based on international standards that handles most of the securities that are held and settled in a dematerialized form in the capital markets of India.
In the deposit system, the securities are held in deposit accounts, which are similar to holding funds in bank accounts. The transfer of ownership of the securities is done through simple account transfers. This method eliminates all the risks and disruptions normally associated with paperwork. As a result, the cost of transactions in a deposit environment is considerably lower compared to transactions in certificates. In August 2009, the number of Demat accounts held with NSDL crossed a crore.