What is TPIN in a Demat Account

You may be wondering now what is TPIN ? TPIN means a 6-digit unique code that allows your stockbroker to debit shares from your Demat account. CDSL stores every user’s TPIN in its database. This facility came into existence on June 1, 2020. It is one of the best ways to secure all your Demat account transactions.

The stockbroker would ask you to provide your e-sign on a Power of Attorney (PoA) while opening a Demat account online. 

PoA is a legal document by which you permit the stockbroker to decide and act on your behalf. For example, your stockbroker will get the limited authority to debit a financial asset from your Demat account when you place a sell order for it. 

Many activities take place without the concern of customers in terms of PoA. 

Here are some disadvantages of PoA— 

• Securities withdrawal occurs when a customer doesn’t place an order to sell. 
• Securities transfer from a Demat account to a broker pool account. 
• To make customers fearful and pay to avoid trading losses.

Its Full-Form

It stands for Transaction Personal Identification number. You can use it only for Demat trading accounts. 

CDSL Full-Form

CDSL stands for Central Depository Service Limited, responsible for generating and managing the Transaction Personal Identification number. 

TPIN Meaning

As the meaning of TPIN is very simple, it is an additional password that provides additional security to the securities in your Demat account, especially when you debit a particular share or any other security from your Demat account for selling.  

Advantages of Transaction Personal Identification Number

• CDSL Transaction Personal Identification number is necessary when there is no PoA with the stockbroker for every Demat withdrawal transaction you make. 
• However, with the advent of the CDSL Transaction Personal Identification number, there is no need for POA for the Demat account. The main objective of the CDSL Transaction Personal Identification number is to make the Demat transactions safe and secure. 
• You will get better control over your Demat account transactions. 
• It is difficult to tamper with the Demat transactions. 
• It makes the Demat account opening process easy and completely paperless. 
• There was a time when investors and traders had to fill out and sign the paper form of PoA. In today’s time, it is an entirely paperless process.

When Do You Require Authorization?

As you are well aware of the CDSL TPIN, it is helpful to get enhanced security and authorization for the transactions to take place through the Demat account. There is a need to insert the CDSL TPIN first, to begin the sell transaction. You will have to wait for carrying forward the trade until you get validation as an authorized user from CDSL. You will have to follow some steps to start selling, like clicking on the “Authorize Now” button to visit the CDSL portal. It is mandatory to enter the CDSL TPIN over here. You can use the same pin for the following different purposes- 

• When you make changes to the order for sale, your delivery account will get your intraday shares.  
• It is possible to convert your sell order from intraday to delivery. 
• You can get margin benefits on your stocks using the same TPIN.

A Step-by-step Guide to Generate CDSL Transaction Personal Identification Number

It is essential to have the CDSL TPIN to carry out sell transactions online. Before creating your TPIN, make sure to create a TPIN for your Demat account. Here is the following procedure that helps to create a CDSL TPIN. 

• You will have to click on the TPIN link in your profile. After clicking on it you will be moved to the CDSL portal to create a CDSL TPIN. There will be two fields like BO ID and PAN that you must fulfill compulsorily. 
• Upon successful information insertion, you will get navigated to a screen where you will have to enter your OTP received via a registered mobile phone number and email ID.
• After validating your information successfully, you will receive your newly generated CDLS TPIN in your registered mobile phone number and email ID. Finally, you can use this CDSL TPIN to make authorized sell transactions using your Demat account.  
• In hardly 6-minutes, you will need to get your CDSL TPIN mapped to your CDSL Demat account.

You will have to ensure that you have followed the process in a proper way to receive your generated CDSL TPIN.  

What is CDSL in India?

The Central Depository Services Limited (CDSL) is India’s second securities depository institution. It came into existence in 1999. It allows you to store different types of securities such as Stocks, Bonds, Mutual Funds, etc electronically. Since its inception, it has been working for the Bombay Stock Exchange (BSE). 

Along with BSE, other financial institutions such as the State Bank of India, Bank of Baroda, Axis Bank, HDFC Bank, Union Bank of India, and Standard Chartered Bank majorly promote CDSL. Almost 600 stockbrokers with different capacities coordinate with CDSL as depository participants (DP). CDSL has the basic focus of offering secure and reliable depository services. 

How Does CDSL Work?

Now you understand what exactly CDSL is? In this segment, you will come to know about the working procedure of CDSL. CDSL works in the same way as a bank does, the only difference is that CDSL facilitates holding securities, while a bank facilitates keeping your money. It is not possible to directly approach CDSL to open a Demat account, you will have to look for a Depository Participant (DP) that can help you to open a Demat account in the depository CDSL.

What is a CDSL Demat Account?

A CDSL Demat account means an account that you opened with CDSL. You can open a CDSL Demat account offline as well online. The very first thing you must do is lookout for a depository participant registered with CDSL, which can be a bank, stockbroker, or any other Indian financial institution. You can check out the procedure along with a list of documents to open this account on the DP platform you selected.

Conclusion

To open a Demat account in India, there is a need to submit your KYC documents that include your address proof, identity proof, PAN card, etc. After you complete verification successfully, you will get your Demat account number and other relevant information associated with this account. You can take advantage of services by buying and selling stocks and other securities in the Bombay Stock Exchange (BSE). Your Demat account can provide you with a 16-digit numeric character. To use your Tpin number you need to keep it safe and use it while selling a security.