The advent of the Demat account has revolutionized the way shares are traded in India. It has brought transparency, efficiency, and security to the Indian stock market. The Demat account holds shares in an electronic form, and trades happen through a computerized system. While it is easy to buy and sell shares through a Demat account, many people still hold shares in a physical form. In this article, we will discuss how to transfer your physical shares to the Demat form.
Step 1: Open a Demat Account
The first step in transferring physical shares to the Demat form is to open a Demat account with a Depository Participant (DP). A DP is a registered agent of the Depository that holds the shares in electronic form. The DP can be a bank, financial institution, or brokerage firm, among others.
To open a Demat account, you need to fill an account opening form that is available with the DP. The form will require personal and financial information, including your name, address, PAN number, and bank details. You will also need to provide proof of identity, proof of address, proof of income, and a passport-sized photograph.
Step 2: Get a Demat Request Form (DRF)
Once you have opened a Demat account, you need to get a Demat Request Form (DRF) from your DP. The DRF is a legal document that authorizes the DP to transfer shares from physical to electronic form. The form also contains details like the name of the company whose shares are being transferred, the number of shares, and the folio number.
Step 3: Fill and Submit the DRF
Once you have obtained the DRF, you need to fill it with details of the shares that you want to transfer. You need to enter the name and address of the company whose shares are being transferred, the number of shares, and the folio number. You also need to enter your Demat account number and your name and address as it appears on the share certificate.
After filling the DRF, you need to sign it and submit it along with the physical share certificate to the DP. You may need to pay some fees for the transfer of the shares.
Step 4: Verification of Transfer
After submitting the DRF and share certificate, the DP will verify the transfer. The DP will verify the signature, the share certificate, and the DRF. The DP will then forward the DRF to the company whose shares are being transferred. The company will verify the details on the DRF with its records and then authorize the transfer of shares to the Demat account.
Step 5: Crediting of Shares in Demat Account
Once the company authorizes the transfer of shares, the DP will credit the shares to your Demat account. You will receive an electronic statement of your holdings in your Demat account, which will now include the shares transferred from the physical form.
It is important to note that the process of transferring shares from physical to electronic form can take up to two weeks or more, depending on the speed of the verification process and the company’s policies. Additionally, you should ensure that the share certificate is not mutilated or damaged, as this can cause delays in the verification process.
