There are 55,000 multiple demat accounts with depository participants, apart from the 50,000 belonging to Roopalben Panchal and associates, unearthed by the Securities and Exchange Board of India recently.
This is according to data collected by the National Depository and Securities Ltd.
NSDL Chairman CB Bhave said there were about 1,000 instances of more than 20 demat accounts having the same address and these added up to 55,000.
Of these, 7,000 accounts did not have proper supporting documents required to comply with the "know-your-client" norms for depository participants. The depository has asked its participants to identify persons linked to these fake accounts or freeze them if those backing such accounts cannot be identified.
The NSDL report has come after Sebi directed the depository to investigate the extent of duplicate accounts and whether proper due diligence was done while opening fresh demat accounts.
A Sebi probe into the IDFC and Yes Bank initial public offer scam revealed that certain investors applied for the IPOs using multiple demat accounts to ensure a higher allotment of shares for themselves.
Depository participants have claimed that the remaining 48,000 accounts are clean and have supportive documents to prove that they are genuine. But the depository will probe further to see if this set of accounts are fake or not.
NSDL has asked its depository participants to report instances where more than 20 demat accounts are linked to the same address. Further, participants have been asked to check if the "know-your-customer" documents for multiple demat accounts are in order.
On January 31, NSDL hosted 7.42 million accounts, up 2 per cent from the previous month.
Having multiple demat accounts is not illegal and the regulation is silent on how many demat accounts an entity can maintain. However, benami accounts or accounts that do not have real people backing them are illegal.
The demat story
NSDL to depository participants:
- Report instances where there were more than 20 demat accounts linked to the same address.
- Check if the know-your-customer documents were in order, in instances where multiple demat accounts were reported.