India’s Oldest Depository Introduces Blockchain for Bonds

UTC by John K. Kumi · 3 min read
India’s Oldest Depository Introduces Blockchain for Bonds
Photo: PIB in Maharashtra / Twitter

NSDL is very dominant in its field as it controls about 89% of market shares measured in securities asset value.

The oldest depository in India National Securities Depository Ltd (NSDL) has taken a step further in its monitoring of bonds by introducing a distributed ledger technology platform for its Debenture Covenant Monitoring System. This is to ensure that transactions between debenture trustees and issuers are subjected to an immutable and verifiable audit trail. NSDL is very dominant in its field as it controls about 89% of market shares measured in securities asset value. Its distributed ledger technology platform was launched in its 26th-anniversary presentation alongside the Securities and Exchange Board of India (SEBI).

“This is the single biggest differentiator between private DLT manifestations and what we commonly refer to as Central Bank Digital Currencies where it is not envisaged that this aspect of the technology would be put to use as we don’t wish to have anonymity,” according to SEBI Chairperson Madhabi Puri Buch.

He further stated that the popularity of blockchain technology is largely embedded in its transparency. According to reports, the network will be maintained by two nodes and will be controlled by the Central Depository Services Ltd. (CDSL), a SEBA division, and NSDL.

This implementation means that the data previously managed in a centralized database will now be signed cryptographically, time-stamped, and added to the Ledger.

NSDL has stated that this will not be the last as they seek to move a step forward to introduce more technologies and to build market infrastructures for security and monitoring Bond issuances.

Union Finance Minister Nirmala Sitharaman has commended NSDL, stating that it has stayed true to its tagline, which is “Technology, Trust and Reach”.

As it stands, NSDL has about 27 million Demat accounts with a value of securities more than $4 trillion. According to NSDL Managing Director & CEO Padmaja Chundru (ANI), this will reach $5 trillion soon.

Recently, the Indian Ministry of Electronics and Information Technology issued directives to crypto exchanges and virtual network providers to keep users’ data for no more than five years. They were also instructed to report all cyber incidents to the appropriate authorities within six hours after the occurrence.

“When required by order/direction of CERT-In, for the purposes of cyber incident response, protective and preventive actions related to cyber incidents, the service provider/intermediary/data center/body corporate is mandated to take action or provide information or any such assistance to CERT-In,” according to the directive.

The recent decisions by the Indian government have caused privacy concerns among individuals as they claim the government wants to control their private lives.

“Our government wants to control the private life of the people and our constitution does not allow this but to be honest, no one in India is much conscious about personal data,” said a user.

Blockchain News, Bonds, Cryptocurrency News, Market News, News
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