Sebi proposes raising limit of value of securities held in basic demat account to Rs 10 lakh

Basic demat accounts were introduced in 2012 to promote financial inclusion

The market regulator has proposed increasing the limit of securities' value held in the Basic Services Demat Account (BSDA) significantly.

BSDA was introduced in 2012 to promote financial inclusion.

Currently, the value of securities that can held in this account is debt securities worth up to Rs 2 lakh and other than debt securities worth upto Rs 2 lakh in a single demat account. The regulator has proposed increasing this limit to Rs 10 lakh worth of securities.

In a consultation paper issued on June 5, the Securities and Exchange Board of India (Sebi) has also asked if the Rs 10-lakh limit should be across debt and other-than-debt securities or if separate limits should be retained for the two categories.

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The paper stated, "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 facility for BSDA has been reviewed and it is proposed to enhance the limit for a demat account to be categorized as BSDA.

It added that the regulator is also reviewing the account maintenance charges (AMC) for BSDA and the services that will be provided through it.

The charges for accounts that hold up to Rs 1 lakh in debt securities and Rs 50,000 in other-than-debt securities are charged no AMC currently. This limit has been proposed to be revised to Rs 4 lakh.

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AMC for accounts holding between Rs 4 lakh and Rs 10 lakh worth of securities has been proposed as Rs 100.

Accounts holding more than Rs 10 lakh worth of securities has been proposed to be considered as a regular account, and therefore be charged the regular AMC.