Demat account is registered with CDSL, and it authorizes the trader to purchase and sell stocks with NSE and BSE. When a trader buys stocks on the Zerodha platform, the company virtually transfers the stock units into the trader's Demat account. In return, Zerodha issues POA (Power of Attorney) where it acts as an authorization to Zerodha to sell the stocks on the trader's behalf.
With everything that has moved from paper to digitalization, the traders still need to sign a physical copy of the POA and send it to Zerodha. The process takes days to finish, and till then, the trader needs to wait. However, with the insecurity of online transactions, selling stocks online has become vulnerable with this method.
To eliminate the waiting period, make online trading seamless, and add more layers of security, CDSL introduced TPIN to all online brokers as a six-digit code to authorize brokers to withdraw stocks from the trader's Demat account. In addition, CDSL TPIN provides a limited period to Zerodha to sell the trader's stocks when the trader chooses to withdraw the stocks.
The TPIN is generated by CDSL thru their official website and sent to the user registered mobile number to authorize the selling transaction and carry forward the trading. Every time the trader wishes to sell the stocks, they need to confirm the trade first. However, the trader can use the same TPIN to change the sell order to delivery from intraday and change the sell order to transfer the intraday stocks delivery in the Demat account. In addition to this, the trader is also allowed to use the same TPIN to get the margin interests on the stocks.
0 Comments