Central Depository Bangladesh Limited

Central Depository Bangladesh Limited (CDBL) was incorporated as a public limited company on 20th August 2000 to operate and maintain the Central Depository System (CDS) of Electronic Book Entry, recording and maintaining securities accounts and registering transfer of securities; changing the ownership without an physical movement or endorsement of certificates and execution of transfer instruments, as well as various other investor services including facilitation of the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Bank.

What is a depository?
A depository is like a bank for shares instead of money. Instead of holding shares in the form of certificates, investors have accounts in the depository and are able to move securities and settle stock exchange transactions by an electronic update of their accounts.

Virtually all established markets have depositories including India, Japan, Malaysia, Pakistan, Sri-Lanka and Thailand, UK and USA.

The core service of a depository is the efficient delivery, settlement and transfer of securities through a computerized book entry system.

What is a depository needed?
The need for a depository arose from shortcomings in the present settlement system, resulting in:

• Lengthy delays in delivery settlement and transfer of securities;
• Tedious procedures for verification of securities and transfer deeds;
• Considerable time involved in dispatching cash dividends and bonus shares;
• Risk of damaged, lost, forged and duplicate securities;
• Serious problems associated with physical custody;
• Tedious procedure involved in pledging of physical securities to raise capital.

Central Depository Bangladesh Limited (CDBL), a joint venture company setup by banks, stock exchange, Asian Development Bank and other institutions operates the Central Depository System (CDS) in Bangladesh.

CDBL, by converting physical certificates into electronic form, will eliminate the risks of damaged, lost, forged and duplicate share certificates. The instantaneous delivery through electronic book entry will result in immediate transfer of ownership, which presently can take over a month. CDBL, in the long term, will also reduce the costs of the investing public.