Deletion of name

When one holder in a joint demat account dies, the surviving holders have a choice. They do not have to open a brand-new account.

They can instead keep the existing account. Only the deceased holder's name is removed from it. The workbook calls this deletion of name.

This option sits alongside the older route of opening a completely new account and transmitting the balance into it. Deletion of name is usually the simpler path, but it comes with a strict time limit.

To delete a deceased holder's name, the surviving account holders submit an application to the DP in the form specified for this purpose, along with a copy of the death certificate, duly attested by a Notary Public or a Gazetted Officer. The DP verifies these documents and the signatures of the surviving clients, and, once satisfied, effects the deletion of name.

The request must reach the DP within one year, that is 365 days, of the holder's death. If it is received after that period, the DP cannot simply delete the name — it must instead follow the older procedure of transmitting the balance to a new account opened by the surviving holders.

The workbook states a related rule for transmission (p115): encumbered securities, and securities in ISINs that are inactive or frozen, are handled only once the encumbrance is released or the corporate action is processed. It gives no separate rule of this kind for deletion of name. With regard to a transfer to legal heirs from a nominee in the case of a joint holding, the Participant need not seek any further documentation — including KYC, indemnities or undertakings — from the surviving joint holder beyond the death certificate itself.

Mr and Mrs Patel hold a joint demat account with 1,200 shares worth Rs 7,20,000 at Rs 600 each, Mr Patel as first holder. Mr Patel dies on 10 January.

If Mrs Patel applies for deletion of his name by 9 January the following year — within the 365-day window — she submits the deletion form and an attested death certificate to the DP, which verifies her signature and effects the deletion. The account continues to exist, now solely in her name, still holding the same 1,200 shares, with no need to open a fresh account or re-transfer the securities.

Had she instead applied on, say, 15 February the following year — more than 365 days after Mr Patel's death — the DP could no longer use the deletion-of-name route. She would have to follow the transmission procedure instead: open a new account in her own name and have the balance transmitted into it from the old joint account, which is then closed.

Chapter 6, section 6.3.3 (Transmission of Securities held jointly in the Depository), sets out deletion of name as an alternative to opening a new account, immediately after describing the standard transmission route, and gives the 365-day deadline explicitly.

Expect a question on the time limit for a deletion-of-name request, and on what happens if that limit is missed — the answer is that the DP must fall back on the ordinary new-account transmission procedure, not that the request is simply refused outright.

• The 365-day deadline runs from the date of death, not from the date the surviving holders decide to act.
• Missing the deadline does not mean the securities are stuck — it only means the surviving holders must use the new-account transmission route instead of the simpler deletion-of-name route.
• Encumbered or inactive-ISIN securities are not released by a deletion of name — they remain blocked until the underlying encumbrance or corporate action is resolved, exactly as they would under ordinary transmission.
• Do not confuse this with transmission-cum-dematerialisation, where a deceased joint holder's name is removed from a still-physical certificate at the point of dematerialising it, rather than from an existing demat account.