The depository system is very similar to the Banking system. - Vidyadip

Question

The depository system is very similar to the Banking system.

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Answer

The depository system is similar to the Banking system in many aspects.
Depository keeps the securities safe, just like the bank keeps the money of the account holder safe.
In banks, funds are held in accounts having unique numbers. Similarly, securities are held in accounts having unique IDs.
There is no physical handling of money in the bank. Similarly, there is no physical handling of securities by the depository.
Bank facilitates the transfer of funds between accounts. Depository facilitates the transfer of securities between accounts.
Thus, it is rightly justified that the Depository system is very similar to the Banking system.

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