The Hindu Business Line : `Demat a/cs without PAN proof disallowed'

The NSDL has frozen several demat accounts as investors failed to furnish proof of PAN cards. Mr C.B. Bhave, MD of NSDL, says from April 1 onwards nobody can open a demat account without PAN proof.

Excerpts from CNBC-TV18's exclusive interview with Mr C.B. Bhave:

What sort of a regulation is this and what sort of an immediate impact would you see on investors?

If you remember in February, the SEBI had given a directive following the IPO problems that each investor who opens a depository account must provide a PAN number. So from April 1 onwards nobody can open a demat account without a PAN proof. For the people who had already opened accounts, a period of six months was given, which was subsequently extended by another three months. So now, of the 77-lakh accounts that we have, we had to freeze 37 lakh accounts because for 40 lakh people provided the PAN details.

Would any grace time be given?

In fact all investors still have time. They can produce PAN card and then these accounts will be de-frozen.

Is there no time limit? You are allowing the de-freezing as soon as PAN cards are produced?

That is correct. The only precaution the investor should take is that they must submit their PAN card and expect the account to be de-frozen on the following day, four hours time would be required for processing the de-freezing.

But would these be largely accounts that are not frequently traded or dormant accounts?

Out of the 37-lakh accounts that are frozen, there are 19-lakh accounts in which there are no holdings at all. There are 18-lakh accounts in which there are holdings.

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