Discrepancies in the Demat Account

Demat account discrepancies refer to the inconsistencies or errors in the statement of records in your demat account. These discrepancies can be in the form of incorrect transaction entries or even differencing security balances.

 

You should, therefore, identify and resolve these discrepancies for the proper maintenance of correct investment records, and not doing so can lead to probable financial losses.

 

The Most Common Demat Account Discrepancies

Some of the most common demat account discrepancies that you are going to experience as an investor are as follows:

 

1. Inconsistent Entries of Transactions

The wrong entries for transactions can also occur because of errors at the data entry level, technical flaws, and miscommunication between brokers and depositories. These differences could range from incorrect entries of purchase or sale, wrong dates, and even wrong amounts of a transaction.

 

2. Mismatch in Securities Balances

Mismatched securities balances refer to the discrepancy between the number of securities in a Demat account as shown by a depository participant and those actually held by an account holder. This could be due to a transaction not being recorded or a delay in updating the accounts, primarily through corporate actions like bonus issues and stock splits.

 

3. Double Entries

Duplicate entries in your Demat account can misinterpret information cues, and tracking your effective holdings could become a nightmare. These may be because of periodical failure of systems or repeated entry of the same transaction.

 

4. Missing Securities

There can also be a case of securities missing from your Demat account. This might be because of unprocessed transfers, updating of the corporate action wrongly or even administrative oversights.

Causes of Discrepancy in Demat Account

The most common reasons for demat account discrepancies are as follows:

• Technical Issue: If there is a problem in the depository operating system or a brokerage platform, the transaction will not get executed or could be delayed for processing the update.
• Inadequate Communication: Inadequate communication among brokers, depositories, and investors might result in unmatched entries of the same transaction at their end, thus showing different security balances.
• Corporate Actions: Updates about mergers, acquisitions, bonus issues, stock splits, etc., will result in an unmatched balance or missing securities.

 

How to Resolve Demat Account Discrepancies

You can resolve all these demat account discrepancies by following these tips:

1. Monitor Your Account Regularly

The first step to spotting discrepancies in your Demat account and resolving them would be through adequate monitoring. Spot inconsistencies in time by checking account statements, transaction history, and securities balances, often.

 

2. Reconcile Your Records

Maintain a personal record of all the transactions and reconcile it with the Demat account statements. It would easily help spot discrepancies and collect the related evidence for further follow-up action that would be required.

 

3. Contact Your Depository Participant (DP)

If there are any discrepancies, notify your Depository Participant immediately. Collect complete details regarding the discrepancy, e.g., transaction dates, amounts, and other relevant documents pertaining to the inconsistency.

 

4. Register a Grievance

In case DP fails to resolve or acknowledge your problem within a specific timeframe, you should file a dispute with the depository (NSDL or CDSL). You can do this online through their online grievance redressal system or you can send them a written complaint.

 

5. Follow Up Regularly

Keep following up with the depository at regular intervals until the discrepancy is resolved. Maintain a record of the correspondences and replies so that you always have a clear trail of the resolution process.

 

6. Escalate if Needed

If the problem remains unsolved by following the prescribed procedures, then proceed to escalate the matter to higher authorities. You can escalate complaints to SEBI or towards the investor grievance cell of the designated stock exchange.

 

Conclusion

It is important to resolve potential discrepancies in the Demat account for the accuracy and integrity pertaining to your investment portfolios. You can safeguard your investments well and also have a smooth trading experience if you are aware of the common types of discrepancies and how to resolve them.

 

Opening a Demat and trading accounts with a reliable and trusted broker is the best way to stop these discrepancies from occurring in the first place. So, open a free demat account with Almondz Trade for discrepancy-free trading.

 

Disclaimer: This blog is posted solely for educational purposes. The securities mentioned are examples and not recommendations. It is based on various secondary sources from the internet and is subject to change. Please consult an expert before making any related decisions.