Stock exchanges, markets players and analysts today welcomed Finance Minister P Chidambaram's proposal to introduce one demat account for all financial investments of an individual, saying the move will deepen financial markets and also make the process much simpler.
"Having a common demat account by creating one record for all financial assets of every individual is an excellent initiative by the Finance Minister. It will go a long way in creating an investment culture in the country," BSE Managing Director and Chief Executive Ashishkumar Chauhan told PTI.
Presenting the Interim Budget, Chidambaram said the government would create one record for all financial assets of every individual which will have one demat account as the basis for entire investments.
"We want to create one record where all financial assets are held in de-materialised form. One FSDC (Financial Stability and Development Council) approves the report (on the issue) then we will implement it. Regulators had agreed that financial records must be available in one record," he said.
Leading tax expert and Chairman of city-based DHC (Desai, Haribhakti & Co) Consultants Shailesh Haribhakti said the proposal will lead to a far superior management of the financial affairs of an individual.
"The Minister has encouraged single demat account for all financial assets which would include stocks, insurance, mutual funds and debt securities. This would lead to far superior management of the financial affairs of an individual.
"Enabling infrastructure is already there with NSDL. As it captures the entire financial history of an individual, things like tax planning and borrowing on the basis of security will become easier," said Haribhakti.
Geojit PNB Paribas Financial Services Managing Director C J George, too, hailed the move, saying the Minister has demonstrated a good reform measure can be unveiled without spending a penny.
"This is a great step from the government without spending a single penny. For an investor this is a great opportunity. All now we need it for Sebi, Irda, and PFRDA to sit together and work out the details. If all goes well even NPS (National Pension System) can be brought under this apart from insurance, MF and PFs," George told PTI from Kochi.
Akhil Chaturvedi, Senior Vice-President at Motilal Oswal AMC, said the prime benefit of a single demat account for multiple investments is that the investor gets to see a single view of all holdings and their valuation at one place.
"This will enable investors to make correct decisions. Holding investments in demat form ensures complete security and safety as opposed to physical holdings," he said.
