The National Securities Depository Ltd (NSDL) has significantly brought down the effective custody charges for investors by linking the charge to the value of shares in the custody of a depository participant.
It has also decided to levy a 2 basis point transaction charge on both buy and sell transactions as against the existing 4 basis point charge on buy transactions only. Off-market transaction charges have been slashed to 2 basis points on either side ie buy and sell as against the present 10 basis points on the value of the transaction credited.
The new charges would come into effect from August 1 onwards.
The last time that NSDL revised its charges was in February 1999, when it brought down the custody charge to 1 basis point per annum. The charge now would therefore be 1 basis point per annum or the ceiling amount, whichever is lower.
Currently, the depository charges its depository participants (DP) a custody charge of 1 basis points per annum, some of whom, in turn, mark up a certain charge which becomes the charge on an investor.
The maximum charge leviable on a custody value of up to Rs 200 crore during a quarter would now be Rs 25,000 per annum. Between Rs 200-500 crore, the custody charge levied would be a maximum of Rs 50,000. It would be Rs 1,25,000 for custody between Rs 500-2,000 crore and above Rs 2,000 crore, the maximum custody charge levied on a depository participant would be Rs 4,00,000.
"This means that if a depository participant would, under the current charge structure, be paying a custody charge of Rs 25,000 on a custody of Rs 25 crore (one basis point), he would now pay Rs 25,000 for custody up to Rs 200 crore. Similarly, his custody charge bill hitherto was Rs 50,000 if his custody was worth Rs 50 crore. Now this would be his bill if his custody is between Rs 200-500 crore," NSDL managing director CB Bhave told Business Standard.
"Look at it this way. If a DP has a custody of over Rs 2,000 crore, he would be charged Rs 4 lakh per year. A custody that large could imply about one lakh accounts. Hence, an annual charge of Rs 4 per account would be levied," said Bhave.
Incidentally, Central Depository Services Ltd has decided to levy an annual charge of Rs 50 per account as maintenance but decided against any custody charge.
