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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations

Rohan, a BO, wants to freeze his demat account for debits because he will be abroad for six months and wishes to prevent unauthorised transfers, while still allowing credits. What type of freeze should he request?

Rohan should request a freeze for debits only. A debit freeze prevents securities from being transferred out of the account, protecting against unauthorised transfers, while still permitting credits like corporate action allotments to be received. Freezing credits or both, or closing the account, does not meet his need.

  1. AFreeze for debits onlyCorrect
  2. BFreeze for credits only
  3. CFreeze for both debits and credits
  4. DClosure of the account

Explanation

A debit freeze blocks outgoing transfers while credits such as bonus shares or dividends in kind can still be received. A credit freeze would block incoming holdings, a total freeze blocks both, and closure would end the account unnecessarily.

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