Sebi raises basic demat account limit to Rs 10 lakh to boost participation

To boost participation of small investors in the securities market, Sebi on Friday increased the threshold for the basic service demat account to Rs 10 lakh from the current Rs 2 lakh.

The new guidelines will come into force from September 1, the Securities and Exchange Board of India (Sebi) said in a circular.

Increasing the limit of securities' value held in the Basic Services Demat Account (BSDA) will encourage small investors to trade in the stock market and ensure their financial inclusion.

A basic service demat account, or BSDA, is a more basic version of a regular demat account. The facility was introduced by markets regulator Sebi in 2012 to reduce the burden of demat charges on investors with small portfolios.

On eligibility for BSDA, Sebi said an individual is eligible for a BSDA if he/she meets certain criteria such as the investor has only one demat account as the sole or first holder, has only one BSDA in his name across all depositories and the value of securities in