MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) has asked depositories NSDL and CDSL to offer ‘no frills’ demat accounts, in an effort to widen the retail investor base in the country, an official familiar with the proposal told ET.

A demat account is one in which an investor holds his shares in the electronic form. The ‘no frills’ accounts are targeted at retail investors who do not trade regularly.

Depositories collect the fee from depository participants which, in turn, charge the demat account holders.

At present, depository participants (banks, brokerages, registrars) collect an annual maintenance charge ranging from Rs 300-500 for each account, irrespective of whether or not there are any transactions during the year.

In addition, there is also a charge for every sell transaction, which could be either a flat fee, or linked to the value of the transaction. The regulator is of the view that current charges are high are deterring many retail investors from opening demat accounts.