I’ve got a couple of emails about this subject, so I thought I’d share it here, and see if anyone has any fresh ideas.
These readers bought the 80CCF infrastructure bond in the Demat form, which has been now allotted to them, and credited to their Demat account.
Now, these readers want to close their Demat account, and open one some place else, but they are being told that since the bonds are currently locked – in (these bonds have a lock in period of 5 years) they can’t transfer the bonds to another Demat account.
One way to deal with this situation is to rematerialize the bonds, and get the company to issue a physical certificate to them.
This can be done after the bond has been allotted, and you don’t have to wait for the lock – in period to expire to do this. After the bond has been rematerialized you can close the Demat account, and open a new one.
Does anyone have any other ideas on this, or any experience with the process of rematerialization?
Syed – I was in a similar situation as yours. I don’t think there is a way to materialize i.e. convert to paper form. You have two options: 1) Transfer the shares to a friend and 2) There are dealers in market who trade in non tradeable shares and would buy your shares. I followed the second option. Hope this helps !
Goel – Thanks for your suggestion. How can I reach the dealers in market who trade these shares?
I’m not sure if my problem is related to this thread or a different one.
I have my demat account with ICICI and I had purchased few equity shares 5 years ago. Since I lost my interest in share market (no activities in the past 5 years), I tried to sell my equity shares but could sell only one company’s shares. I am unable to sell other company’s shares because they are not currently traded. I’m unable to reach the company PRO for any advice (no valid contacts). Because of this, I cannot close my Demat Account and I am being charged around Rs.500 every year. Can anyone suggest a way out, please?
Is the procedure for transfer of NCD Bonds also the same?
I am holding MUTHOOT FINANCE LIMITED NCD bond and the security name is MUTHOOT OP III 11.75% 01NV17. Can I transfer those NCD bonds online without rematerialiszing it from my ICICIDirect to Kotak securities account?
Thanks Arindam,
I have some queries related to point 2
From where can we get ““Client Master List” and what’s the meaning of stamped copy. Also this needs to be submitted to whom?
I could successfully transfer locked in IDFC bonds from one Demat account to another and closed one demat account. Here is the process.
1] Apply for “transfer and close” of demat account you want to close in the specified form provided by the DP with the complete details of the target(new) account where you want to transfer all shares including “locked in shares”
2] Submit a stamped copy of “Client Master List” which is provided the target DP account along with the Closure form
3] The free shares will be transferred within a week
4] The locked in shares will be transferred only after an approval is obtained from the “Registrar and Transfer Agents” of the locked in shares. In my cases, the R&T agent was Karvy. The closing DP agency is supposed to apply for this permission. This is an internal process of the DP.
5] Get the contact names/mail ID of the R&T agents of the locked in shares and do some follow up with your details. I did 2 follow ups with Karvy (R&T agents for IDFC bonds)
6] The locked in shares get transferred in 2 months time.
7] As per NSDL rules, there will be NO CHARGES during the interim period and your old DP account will be in “Frozen” state. You will not be able to carry out any transaction in the old account as it is deemed as closed.
8] Once the shares get transferred to target DP account, the old DP account gets closed automatically. You may also verify the same by sending a mail to them.
Please note : For transfer of one DP to another DP, the accounts should be in the same names (if one is a single account and other is a joint account, it will not work). The PAN should also match.
Transfering the bonds from one DP to another DP in same name does not amount to change in ownership, I had my DP in HDFC bank and I was not satisfied with services ,I opened new DP account in cosmos bank in same name as it was in HDFC bank and there is form available which you have to fill and submit to DP from where you have to transfer your holdings my case it is HDFC bank and entire holding got transfered to my new DP in cosmos bank and mind it there is no charges for this.
Thanks Manshu and all for the topic and the solution – rematerializing of bonds. I am facing the same problem and this thread enriched my knowledge.
Thanks again. 🙂
i m also facing same problem.
these infrastructure bonds are compulsory in demat form and cannot be dematerialize.
therefore no solution exist at present time.
we have to pay demat annual maintenance charges of Rs.450 per year till the end of five year. which comes out to rs. 2250.
tax benefit on Rs.20000 @30% is Rs. 6000.
difference between market rate of interest and intt rate on bond is 4% (12.5%-8.5%).
loss due to low interest rate : Rs20000*4%*5year= 4000
therefore net loss is rs. 250.
after locking your money for 5 year you get net loss of Rs.250.
regards
atul
9718663223
no need to incur any loss. write to ifci or the company in question and they will direct the depository to do remat . after this close the demat a/c.
it takes several weeks for the rematerealistion though. I have recently got the same done .
RAJIV
You don’t need the Demat account just for this, you can rematerialize your bond and have it in physical format as Rajeev has suggested.
Sir ! I want to close my demat account.Before closing the demat,I want to transfer shares to brothers account as I have borrowed some money from him.If I transfers all my shares to his demat account,will tax liability of my brother will increase(will it be treated as purchase of shares)?Please advice me.
You can gift the shares there will be no tax liability.
Guys it’s not as complicated as you all are telling…you just need to fill a Remat application & hand it over to your DP..processing is done by them..you can view the status or your DP will be able to tell you over phone… you should be able to get in paper form to the address mentioned in your demat A/c..in not more than 2 months..then you can close the A/c
same problem here with idfc bonds. But my dp idbi capital says that it is not permitted to rematerialise prior to locked in period. However you can freeze the account to get waiver from dp charges Till the bonds come up for redemption.
@Rohit: I could get the problem resolved by getting the forms in paper form. Submit request with your current DP for getting the bonds in physical form and then you will be free 🙂
That’s great K – thanks for that input.
Also facing the same problem.
I am trying to close my hdfc demat account. i will fill up the remat form and ask IFCI for physical holding.
I am facing the same problem. Vivek, did you got update from IFCI about anything on this?
I am also facing same problem.
Already moved from old to new DP for stock trading, but not able to shift IFCI bonds. Loosing more (paying D’mat annual fee Rs 1250) than gaining from Bond interest. Old DP asking to discuss with IFCI. Really got stuck.
Will try to call IFCI at 011-41792800 / 41732000.
My request to all to keep on updating if anything positive comes-up.
I am also in same boat , check this link :
https://nsdl.co.in/services/remat.php
Thanks for giving link
Thanks for giving link
all please try following link
https://nsdl.co.in/services/remat.php
Am also facing the same situation.
Have IFCI bonds in demat form in one of my dp.want to switch over to another dp.
Anyone tried the options listed above?
How much time it will take?
Recently RBI issued a directive wherein you can shift your mutual funds from one DP to another . Is this one of the alternatives that can be used . I also have ELSS funds and am planning to close the DP account if this is permissible.
So Zaheer – are your ELSS funds still in the lock in period? IF that’s the case then yes, you do have a very good point, and this might be a third alternative for sure.
Transfering the bonds/ securities from one DP to another DP in same name does not amount to change in ownership, I had my DP in HDFC bank and I was not satisfied with services wanted to close DP account ,I opened new DP account in cosmos bank in same name as it was in HDFC bank and there is form available which you have to fill and submit to DP from where you have to transfer your holdings my case it is HDFC bank and entire holding got transfered to my new DPin cosmos bank and HDFC DP account got closed in and mind it there is no charges for this
WOW!!! These bonds are proving to be a lot of trouble it seems. I’m also in the same boat. Have the bonds in my RBS equity a/c and wanted to close that demat since they have a couple of issues like not offering few of the major IPOs, extra transaction charges etc, but it seems it would not be that straight forward.
Starting to regret the moment I enrolled for these bonds.
Sorry to hear that Nikhil – so what route are you going to go then? Rematerialize them? Is there any other option?
I am also facing with the same problem. I think only thing after reading reading your comments is to rematerialize the bonds, and get the company to issue a physical certificate.
But is there any one who has done so…how much time it will take to convert into physical certificate???
I have rematted my bonds. It takes about 1-2 months. You have to chase both your DP and the issuing company IFCI ( in my case) to get it done. After rematting you can close the DP account.