• Demat accounts

I have just opened a Demat equity account, which opiginally(with certificates) I was the 1st holder and she the second. This has now been converted to joint demat account with me as 1st holder and my sister in India 2nd holder, I originally thought that 1st holder operates the account and upon his demise the second holder takes over. I am also fear that my brother-in-law might grab some of the money although he is not listed in the joint account. How would I operate my account from USA(NRI) if I wish to make periodic withdrawals for my expenses.Can the 2nd holder also operate at the same time-which can cause misunderstanding. I thought the ist holder is the primary holder through who the seconday holder has to get approval when making withdrawals or trading transactions. Please clarify.
Asked 6 years ago in Business Law

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15 Answers

1) If you have opened joint account and not mentioned any sharing ratio at the time of opening the account by default you both are 50-50% partner in that account.

 

2) Both can operate the account if you have online user and password, like you she can also operates the demat a/c.

 

3) Instead of opening joint account you should have kept your sister as a nominee.

 

4) If you have huge investment in the account either that you withdraw or open fresh demat account where you will be single owner and get share transfer from joint account to single account.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

the correspondence address on the DEMATform will have to be that of the first holder. The KYC along with supporting documents will have to be provided for all the joint holders

 

2) 

In case of joint demat accounts, all account holders involvement is required in key transactions

 

 

3) You cannot change name or add or delete the account holder’s names. In such instances, you have to open new demat account with the desired names.

 

 

4) In case of joint demat account, when someone dies the ownership will be shifted to remaining owners name. In case of demise ofboth account holders then the nominee will get all the benefits.

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

You will not have full control of demat account 

 

2) if you want sole operational control of dense account open it in your name only 

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

1. the operation of the account would depend on the mandate given to the entity with which the account is opened

2. generally the 1st account holder is the one who transacts in the account

3. for purpose of withdrawals, the joint holders can give a separate mandate as to how a withdrawal should be processed, i.e. whether it should require the signature of both holders or either of them

4. similarly for purpose of succession, the join holders can give a mandate like 'either or survivor' or appoint some nominee to whom the funds can be transferred on death. Generally in case of mandates like 'either or survivor', when a joint holder dies, the bank can transfer funds to the surviving holder who would then hold the funds ONLY IN TRUST and not as an exclusive owner. 

Yusuf Rampurawala
Advocate, Mumbai
7899 Answers
79 Consultations

If she can operate without you then it can lead to fraud in your account. You can inform the entity holding that demat account about the same

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

On the death of a joint holder of a demat account, the surviving holder or holders become entitled to the securities. This process requires an application in a prescribed format, along with supporting documents, as evidence for the death of the holder.

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

For operation of joint demat  accounts signature of both parties are necessary 

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

Yes you can give such instructions

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

Yes, there is such provision both account holder signature is compulsory not only one. YOu can sign such mandate and send to agent and CDSL plus SHCIL

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

 

In case of joint demat accounts, all account holders involvement is required in key transactions

You cannot change name or add or delete the account holder’s names. In such instances, you have to open new demat account with the desired names.

In case of joint demat account, when someone dies the ownership will be shifted to remaining owners name. In case everyone die, then the nominee will get all the benefits.

 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

In case of joint demat accounts, all account holders involvement is required in key transactions.

 if you have 2-3 demat accounts in your family member’s name, and then you have to pay some annual charges for each account. But if you would have a single demat account having other family members as joint owner, then you just have to pay the charges of one demat account

In case of joint demat account, when someone dies the ownership will be shifted to remaining owners name. In case everyone die, then the nominee will get all the benefits.

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

Yes, that will be the best option before you.

You may inform them in writing about it to safeguard your interest.

 

 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

Generally, both the joint holders of the account can do transactions from the account but in certain cases signatures/ consent of both the account holders are required.

There is no such condition that the first holder is the primary holder and the second holder has to take consent of the first holder before doing any transaction.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

There are no real benefits of being the first holder per se.

You should close this account and open a new one as the sole account holder, if you are apprehensive that your sister is going to misuse the joint account.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

You can give such a mandate to the bank in writing and don't forget to take acknowledgement from them for the same.

Siddharth Jain
Advocate, New Delhi
6617 Answers
102 Consultations

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