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

A DP receives a request from a BO to freeze the account for debits only after the BO suspects misuse of the delivery instruction slip (DIS) book. Which outcome of such a freeze is correct?

A debit freeze blocks only outgoing transfers from the demat account while credits are still accepted. The BO can request that it be lifted following the DP's procedure. It does not block credits permanently or close the account, so the option describing debit-only blocking is correct.

  1. ABoth credits and debits are blocked and the freeze cannot be lifted
  2. BOnly debits are blocked, credits continue to be accepted, and the freeze can be lifted by the BO's request as per procedureCorrect
  3. COnly credits are blocked while debits continue
  4. DThe BO's demat account is closed automatically

Explanation

A debit freeze stops outward transfers from the account while credits can still come in. It is a reversible facility that the BO can have lifted through the prescribed request procedure. Blocking credits is a different type of freeze, and closure is not an effect.

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