SEBI announces raise in BSDA limit

SEBI has announced an increase in the limit for Basic Services Demat Accounts (BSDA) from ₹2 lakh to ₹10 lakh, effective September 1, as per a circular.

This move aims to assist small investors in the securities market, encouraging their participation and promoting financial inclusion. Introduced in 2012, BSDA offers reduced demat charges for investors with smaller portfolios.

To be eligible for a Basic Services Demat Account (BSDA), an individual must fulfill specific criteria. These include maintaining only one demat account as the primary holder, having a single BSDA across all depositories, and ensuring that the total value of securities in the BSDA does not exceed ₹10 lakh at any point in tim

Previously, BSDA eligibility allowed up to ₹2 lakh in debt securities and ₹2 lakh in other securities within a single demat account.

Under the revised rules, no annual maintenance charges apply for portfolios up to ₹4 lakh, while portfolios ranging from ₹4 lakh to ₹10 lakh will incur a charge of ₹100.

If the portfolio value exceeds ₹10 lakh, the BSDA will automatically convert to a regular demat account. BSDA holders will receive free electronic statements, with a fee of ₹25 per physical statement if requested.

Depository Participants (DPs) are required to open BSDA accounts for eligible individuals by default, unless otherwise specified by the account holder.

DPs must also review and convert eligible demat accounts to BSDA within two months, unless the account holder opts to retain their regular demat account. This review will occur at the end of each billing cycle.

SEBI recently issued a consultation paper to gather opinions on its proposal to increase the BSDA threshold limit.