The customary system of script based dealing in shares involves enormous paper work and is time consuming. It also involves problems like bad deliveries, forgery and fake certificates, mutilation / tearing due to bad handling, loss of certificates, delay in receipt due to huge volumes being handled, etc. The process begins with buying share certificates in paper form and ends with getting the certificates endorsed in the buyer's name.
The Depository System aims at facilitating paperless trading and settlement of securities in electronic form. It eliminates the problems associated with physical securities and enables faster transfer / settlement and reduction in transaction costs such as brokerage, postage, etc.