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NISM Certifications · NISM-Series-VI: Depository Operations · Investor Services (NISM VI)

A BO's demat account has been frozen by the DP on a depository instruction. Which of the following is the effect of a 'debit freeze' on the account?

Under a debit freeze the BO cannot make any debits from the account, such as transfers out, but credits can still be received. It differs from a total freeze, which blocks both debits and credits, so incoming securities and corporate action benefits still arrive.

  1. ANo debits can be made, but credits can still be receivedCorrect
  2. BNeither debits nor credits can be made
  3. CBoth debits and credits are allowed but only after 30 days
  4. DOnly pledged securities can be debited

Explanation

A debit freeze blocks all debit transactions, such as delivery instructions, while credits like incoming transfers or corporate action benefits can still be received. A total freeze on both sides would be a 'total freeze' or account freeze, not a debit freeze.

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