SEBI has proposed significant revisions to the Basic Services Demat Account (BSDA) framework through a new draft circular titled “Ease of Investments and Ease of Doing Business – Review of BSDA for Financial Inclusion.” The objective is to ensure that eligibility criteria and valuation norms accurately reflect an investor’s realizable and liquid holdings, thereby strengthening fairness and accessibility within the demat ecosystem.
A BSDA is designed as a low-cost demat account to support retail investors with smaller portfolios. Currently, accounts with holdings up to ₹4 lakh enjoy zero annual maintenance charges, while those between ₹4 lakh and ₹10 lakh pay ₹25 per quarter, and holdings above ₹10 lakh incur ₹75 per quarter. SEBI’s latest proposals attempt to refine what counts toward these valuation thresholds.
One of the most important changes is the proposal to exclude delisted securities from BSDA valuation. Since delisted securities lack active trading, price discovery, and liquidity, SEBI argues that they should not artificially inflate an investor’s portfolio value. Treating them on par with suspended securities ensures that eligibility is based on market-linked, realizable assets, not illiquid entries.
Another major proposal is the exclusion of Zero Coupon Zero Principal (ZCZP) bonds. These securities, created under social-impact frameworks, are non-transferable, non-tradable, and have no redemption value. SEBI highlights that counting such instruments in BSDA valuation contradicts the intent of using actual realizable value to determine eligibility. Their exclusion would prevent genuine small investors from being unfairly disqualified.
For securities that are listed but illiquid, SEBI proposes using the last closing price for valuation. This provides clarity while ensuring that valuation remains grounded in observable market data. SEBI also notes that these new valuation norms, particularly the treatment of delisted and ZCZP instruments, will not apply to promoter individuals, maintaining necessary regulatory distinctions.
Operational changes are also on the table. SEBI proposes shifting from DP-wise billing cycle-based reassessment to a uniform, system-driven quarterly reassessment for all investors. This is expected to reduce administrative complexity and enhance ease of compliance for depository participants. Additionally, the current requirement of obtaining investor consent solely through a registered email ID has resulted in low response rates. To fix this, SEBI suggests allowing other authenticated channels for investor consent, simplifying account-classification workflows.
Taken together, these changes aim to make the BSDA framework more investor-friendly, more reflective of actual financial value, and operationally more efficient. Public comments on the draft are open until 15 December 2025, after which SEBI will finalize implementation steps.