CDSL works as a financial securities depository in India. A Depository is responsible for holding securities (like shares, debentures, and mutual funds) in electronic form and enabling securities transactions.
CDSL is one of the two authorised depositories in India. NSDL is another depository.
The CDSL functions in the same way as a bank does. A bank is responsible for safeguarding an account holder's money. CDSL is in charge of protecting the financial securities of its investors.
However, CDSL does not directly interact with investors. It provides its services through authorized depository participants (DP) registered with CDSL. Most stock brokers are DP's and offer CDSL demat account-related services to customers.