NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations
A BO wants to prevent any debits from his demat account for some time while still allowing credits to be received. Which facility should he request from the DP?
He should request a freeze on debits only. A debit freeze stops securities from leaving the account while allowing credits to continue. Freezing both debits and credits would also block incoming securities, and closing the account would end the relationship altogether.
- AFreezing of debits onlyCorrect
- BFreezing of both debits and credits
- CClosure of the account
- DChange of name in the account
Explanation
An account freeze can be total, or limited to debits or credits. Freezing debits blocks outgoing transfers while credits continue to be accepted. A full freeze would block both, and closure ends the account entirely.
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