Trading in the stock market has become a matter of a few clicks. All you need is a Demat account, which you can open with any broking house and relevant apps. This account is also registered with Central Depository Services Limited (CDSL). Whenever you wish to buy or sell shares, you can do so by placing a request through this account. In case you buy shares, they will get transferred to your broking house, which will then transfer them to your Demat account.
However, the broking houses require authorisation from your end for such transactions to take place. For this, they request a Power of Attorney (POA) signed by you. This document permits them to withdraw securities from your account when you sell them. However, it came with its share of troubles. To begin with, you cannot digitally sign a POA. You would have to physically sign a copy to make it valid. This was just the beginning of the inconveniences.
A few broking houses started abusing this to conduct unauthorised trades. For instance, they would debit securities from unsuspecting investor accounts even if they have not placed a request to sell them. Moreover, they would move securities without the consent of the customer and scare them into paying credits on loss from trade. Read about and ways one may be cheated so that you can stay aware and safe.
To deal with this problem, initially, the CDSL started notifying account holders about any activity in their Demat account via text messages and instant updates. But this was not enough. To tighten security and make the process easier, the CDSL introduced the TPIN.
Let us understand what that is.
The TPIN, or Transaction Identification Personal Number, is a 6-digit code that the CDSL generates and sends directly to the customer’s mobile number and email. Authorization via a TPIN is mandatory when you wish to carry out a sell transaction. This code allows the broker or broking house to debit only the selected shares from your account. Every transaction that involves the withdrawal of shares from your account requires a fresh TPIN.
Moreover, a TPIN remains valid only for one day. In case a transaction is carried forward to the next day, you are required to reauthorize the TPIN. You may also revoke the authorization at any time.
The TPIN is generated by CDSL and goes directly to the customer. It is not visible to brokers, and thus they cannot deduct shares from your account without your intimation. Due to this, the transaction process has become more secure.
Let us see when the TPIN is required.
As mentioned above, a new TPIN is mandatory for every sell transaction. However, there are certain situations where you are required to use the same TPIN as generated for the order. These include:
- When you wish to change an existing order to sell securities from intraday to delivery.
- When you want to adjust a sell order to obtain your intraday shares in your delivery account instead.
- When you wish to receive any margin benefits on your shares.
Another use of a TPIN is to pre-authorize the stocks you wish to sell. By doing so, you do not need to authorize the selling transaction for the stocks you have added to your pre-authorized list every time. The TPIN remains valid for those stocks for 90 days.
Using a TPIN has been made mandatory. This has exceedingly improved the security aspects regarding trading in the stock market.
Let us see how to generate a TPIN in a few simple steps.
You can generate a TPIN by following the given steps:
Step 2: On the right side of the page, you will find the ‘Generate e-DIS TPIN’ link. Click on it.
Step 3: Enter your BO ID (Beneficial Owner Identification Number), which is your Demat account number of 16 digits.
Step 4: Put in your PAN details and click on ‘next’.
Step 5: You will receive an OTP on your registered mobile number and email ID. Enter the OTP in the given field.
After finishing these 5 steps, you will receive your ‘generated TPIN’ on your mobile number as well as email. This is a straightforward process that requires only 5 to 7 minutes. Being purely electronic, it has eliminated the need to physically sign POA documents. This has made the process more user friendly.
In case you wish to change the TPIN later, you can again visit the official CDSL website. On the right side of the page, select the ‘Change e-DIS TPIN’ option. Enter your BO ID and PAN details, followed by the fresh OTP received. You will receive the reset pin in your email and on your mobile.
In case you forget what your TPIN is, you can regenerate it at any time. However, in case it gets locked permanently, you can unlock it only with the help of your broker or depository participant.
TPIN is an electronically generated 6-digit code that works as an added layer of security while trading in the stock market. It ensures that no unauthorised sell transactions occur, removing the chances of malpractice by brokers and other third parties. This has also made the process of trading easier by eliminating the need for physical documentation.