Mumbai: All the more reason to get a PAN card – call it a mass clean-up operation or a move towards better transparency – India's largest depository NSDL has frozen 37 lakh demat accounts.
What better way to begin the New Year than with a cleaner, more transparent market – that seems to be market regulator Sebi's stance.
After extending the PAN card deadline from October to December, the mandatory PAN identity system has been implemented for all investors. But the transition may not have been smooth.
NSDL MD CB Bhave said, “Out of the 77 lakh accounts, we had to freeze 37 lakh accounts, because for 40 lakh accounts, people provided the PAN details, 37 lakh didn't. Out of the 37 lakh accounts that are frozen; there are 19 lakh accounts in which there are no holdings at all. All investors still have time. They can produce their PAN cards and then these accounts will be de-frozen."
Sure, they will be de-frozen, but there's no deadline set for investors to present their PAN cards to defreeze their accounts.
For their part, DPs say many PAN IDs could not be processed in time because they came in towards the end of the December deadline, which coincided with a long holiday.
They explain that initial problems were also expected because many accounts are passive or dormant.
With Sebi clamping down on penny stocks, unearthing the multiple demat account scam and tightening the know-your-client norms, brokers say a mandatory PAN card identity is a welcome move.