July 7, 2025
If you’re still holding physical share certificates, time is running out. The deadline to convert your physical shares into dematerialized (demat) form is 31st December 2025. Failing to do so could lead to your shares being frozen under strict regulations including the Benami Transactions (Prohibition) Act and the Prevention of Money Laundering Act (PMLA).
What Is Dematerialization?
Dematerialization is the process of converting physical share certificates into electronic form. It simplifies the process of holding and trading shares while ensuring security and transparency in ownership.
Why the Urgency?
The Government and regulatory authorities like SEBI are tightening compliance norms to eliminate fraudulent transactions, unclaimed assets, and Benami holdings. As part of this drive, shareholders holding shares in physical form are being mandated to convert them into demat before the deadline.
Consequences of Missing the Deadline
- Shares May Be Frozen: You may lose the ability to transfer or sell your shares.
- Regulatory Action: Under the Benami Transactions (Prohibition) Act, unexplained or non-compliant holdings may be treated as Benami and subject to confiscation.
- Compliance Issues: Your holdings could come under the scanner of the Prevention of Money Laundering Act (PMLA), which could invite legal scrutiny or penalties.
Benefits of Dematerialization
- Easy and fast transfer of shares
- Reduced paperwork and risk of loss/theft
- Enhanced transparency and regulatory compliance
- Eligible for corporate benefits like dividends, rights, and bonuses directly to your account
How to Dematerialize Your Shares?
Open a Demat Account with a registered Depository Participant (DP).
Submit a Dematerialization Request Form (DRF) along with your physical share certificates.
The DP will process your request and convert your shares into electronic form.
Act Now to Avoid Legal and Financial Trouble
With the 31st December 2025 deadline fast approaching, now is the time to take action. Don’t let your hard-earned investments be frozen or penalized due to non-compliance. Convert your physical shares to demat form and secure your financial future.
