SEBI Raised Basic Service Demat Account (BSDA) Limit to Rs 10 Lakh

Current Context: The Securities and Exchange Board of India (SEBI) increased the limit for Basic Service Demat Accounts (BSDAs) to ₹10 lakh from ₹2 lakh to encourage more retail investors to participate in the stock market. This change will be effective from September 1, 2024.

• Here's a detail of the new BSDA limits:
• Increased Threshold: The total value of securities you can hold in a BSDA has increased to ₹10 lakh.
• Lower Charges: There's no annual maintenance charge for a BSDA if your portfolio value is up to ₹4 lakh. A small ₹100 annual fee applies if your portfolio value is between ₹4 lakh and ₹10 lakh.
• Automatic Conversion: If your portfolio exceeds ₹10 lakh, your BSDA will automatically convert to a regular demat account, which may have different fee structures.
• This move by SEBI aims to make the stock market more accessible to small investors by reducing costs and simplifying the process.

Question:

1. What is the new limit set by SEBI for Basic Service Demat Accounts (BSDAs) effective from September 1, 2024?

• A) 1 lakh
• B) 2 lakh
• C) 4 lakh
• D) 10 lakh

Answer: D) The Securities and Exchange Board of India (SEBI) increased the limit for Basic Service Demat Accounts (BSDAs) to ₹10 lakh from ₹2 lakh to encourage more retail investors to participate in the stock market.