NSDL Adopts Blockchain Platform (DLT) For Debenture Covenant Monitoring

The National Securities Depository Limited (NSDL), having around 89 percent market share in Demat assets value in India, has revealed Distributed Ledger Technology(DLT), or a blockchain platform for Debenture Covenant Monitoring.

The Chairperson of the Securities and Exchange Board of India (SEBI) – Mr. Madhabi Puri Buch, disclosed the blockchain platform to mark the silver jubilee celebration of the NSDL.

During one of the interactions, Buch said the demat revolution (the recent steep rise in new demat accounts in India, at a rate of around 25 lac every month, nearly four times the pre-pandemic rate) was the very first step by which the entire market was embracing technology. Therefore, this day will also be memorized as an essential day as we are putting the first step in using the Debenture Ledger Technology in the markets.

The DLT blockchain will bring complete transparency to issuers and debenture trustees on the same level to document asset charges and monitor the asset cover ratio and various covenants of the issuance and transparency in the debenture market.

NSDL claims that the Depository will move one step ahead in adopting new technologies and building the critical market infrastructure for bond issuances’ security and covenant monitoring.

Union Finance Minister Nirmala Sitharaman appreciated the Depository’s rapid growth, especially with new blockchain technologies. She further mentioned that NSDL stands true to its tagline ‘Technology, Trust and Reach.’

Author: Abhishek Kumar

A self-believer who loves to learn and spread the light of wisdom in his community. You could find him writing about finance, cryptos, and marketing. Moreover, he loves to read non-fiction and drink non-alcoholic drinks.

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