SEBI’s Big Leap: Scaling Financial Inclusion with BSDA Threshold Raised to Rs.10 Lakh

The proposal suggests a substantial increase in the threshold for Basic Services Demat Accounts (BSDA), potentially raising it from the current INR 2 lakh to INR 10 lakh. This move intends to make it easier for individuals to maintain securities in demat accounts.

Currently, BSDA holders enjoy exemption from account maintenance charges if they hold up to INR 1 lakh in debt securities and INR 50,000 in other securities. However, under the new proposal, this exemption limit may rise to INR 4 lakh. Additionally, those holding securities between INR 4 lakh and INR 10 lakh may face a nominal charge of INR 100.

SEBI’s Rationale Behind Introducing BSDA

SEBI’s rationale behind these changes stems from the evolving landscape of the securities market, with a focus on encouraging retail investor participation. Introduced in 2012, BSDA was conceived as a tool for financial inclusion, catering to individuals with only one demat account. The valuation of holdings in BSDA will be determined by Depository Participants (DPs) based on daily closing prices or Net Asset Values (NAVs) of securities or mutual fund units.

Moreover, SEBI emphasizes the importance of electronic statements, which will be provided free of cost for BSDA holders. However, a nominal fee, not exceeding INR 25 per statement, may be levied for physical statements.

SEBI Constantly Strives to Broaden Financial Inclusion

This initiative to enhance BSDA aligns with SEBI’s broader agenda of fostering financial inclusion. In a concerted effort last year, SEBI collaborated with mutual fund houses to explore ways to make INR 250 Systematic Investment Plans (SIPs) viable for the industry.

These proposed changes aim to streamline and enhance the accessibility of demat accounts for retail investors, marking a significant stride towards broader financial inclusion in India’s securities market.