Generally brokers have two depository accounts. One with NSDL and the other one with CDSL. Currently, we are registered with CDSL for maintaining client’s holdings.
As per the RBI and depository regulation, SGB units cannot be transferred from NSDL to CDSL or vice versa in any of the government securities.
Whenever you buy SGB, units would get credited either to our NSDL or to CDSL pool account from the exchange. In case the units received in CDSL, we transfer the units to your demat account with us. If the units are received in NSDL then the same cannot be transferred to your CDSL demat account as per the regulation mentioned above. In such case, you would require to sell the units in secondary market. Due to this limitation, the fresh buying of SGB has been blocked.
Moreover, the depositories CDSL and NSDL are regularly in talk with RBI to allow inter DP transfer of units. Once this service starts, you will be able to buy and sell government securities like equity shares.