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India's Depositories Experience Surge in Technology Spending Outpacing Employee Costs
Tech spends of depositories spike: Costs run ahead of employee expenses
Business Standard
Image: Business Standard
In FY26, technology expenses for India's depositories, CDSL and NSDL, surged significantly, with CDSL's costs rising by 43% and NSDL's by 34%. This marks a historic shift where tech spending has surpassed employee costs, driven by a sixfold increase in demat accounts and the need for upgraded systems.
- 01NSDL's technology expenses increased from ₹68.1 crore in FY25 to ₹91.4 crore in FY26.
- 02CDSL's tech spending rose from ₹113.2 crore in FY25 to ₹162.2 crore in FY26.
- 03For the first time since its listing, CDSL's technology costs have outstripped employee expenses, which were ₹156.5 crore in FY26.
- 04The total number of demat accounts grew from 36 million in FY19 to 225 million in FY26.
- 05Automation and the need for cybersecurity and regulatory compliance are key drivers of increased tech spending.
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In the financial year 2026 (FY26), India's two primary depositories, the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL), reported a remarkable increase in technology expenses. NSDL's tech costs rose by 34%, while CDSL's surged by 43%, reflecting a broader trend where technology spending has now surpassed employee costs for the first time since CDSL's listing in 2017. CDSL's technology expenses jumped from ₹113.2 crore to ₹162.2 crore, while NSDL's increased from ₹68.1 crore to ₹91.4 crore. This shift is attributed to a dramatic rise in demat accounts, which increased sixfold from 36 million in FY19 to 225 million in FY26, necessitating enhanced technological infrastructure. Experts note that ongoing investments in technology are essential for maintaining competitiveness and regulatory compliance, as well as for improving client services through automation. The trend indicates that technology costs will likely remain elevated as depositories continue to adapt to market demands.
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The surge in technology spending by depositories suggests improved services and efficiency in the Indian stock market, potentially benefiting investors and market participants.
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