NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations
A BO wants to prevent any debit from his demat account but still wants to receive credits such as bonus shares. Which freeze should be placed?
A debit freeze is the right choice. It blocks all debits from the account, so securities cannot be transferred out, while credits such as bonus shares or purchases can still be received. A total freeze would block credits as well.
- ATotal freeze on the account
- BDebit freeze on the accountCorrect
- CCredit freeze on the account
- DClosure of the account
Explanation
A debit freeze stops debits (transfers out) while credits can continue. A credit freeze is the opposite, and a total freeze blocks both. Closure ends the account and is not wanted here.
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