Why in the news
SEBI floated a consultation paper on 24 November 2025 to overhaul the Basic Services Demat Account (BSDA) so eligibility reflects the real, realisable value of small investors’ holdings.
Key facts
| Holding value | AMC |
|---|
| Below ₹4 lakh | Zero |
| ₹4 lakh to ₹10 lakh | ₹100 plus GST |
| Above ₹10 lakh | Becomes a regular demat account |
- BSDA is a low-cost demat account started by SEBI in 2012.
- NSDL data (February 2025): 1.3 crore BSDA accounts below ₹4 lakh and 4.4 lakh between ₹4 and ₹10 lakh.
Gaps in the old framework
- No clear valuation rules for delisted shares, illiquid shares or ZCZP bonds; some DPs counted ZCZP face value, inflating portfolios.
- Eligibility checked on differing billing cycles.
- Opt-out allowed only via registered email, causing delays.
- DPs often failed to convert eligible accounts, so small investors overpaid.
Proposals
| Area | Proposal |
|---|
| ZCZP bonds | Not counted for eligibility; they are non-transferable, non-tradable, with no coupon or redemption value, treated as social contributions |
| Delisted shares | Excluded; no liquidity, price discovery or realisable value |
| Illiquid securities | Keep valuing at last closing price |
| Reassessment | Quarterly, automated, replacing billing-cycle checks |
| Consent by owners | Allow extra authenticated digital channels beyond registered email |
| Conversion | DP must auto-convert eligible accounts; BSDA is default unless investor opts for regular |
Why now
- Retail participation is surging.
- Small investors hold low or zero-value securities yet pay high AMC.
- Some DPs keep regular accounts to protect margins; at ₹50,000 holdings, AMC of about ₹900 feels disproportionate.
Expected benefits
- Lower costs and greater transparency in valuation.
- Easier opt-outs and consistent assessment.
- Higher demat penetration, fewer entry barriers and better investor experience.
Exam angle
- BSDA introduced in 2012; limit ₹10 lakh.
- ZCZP = Zero Coupon Zero Principal bonds.
- Reassessment moves to quarterly.