Those who open demat accounts online would know that brokers fetch the name from the PAN database and sometimes it could be different from what is printed on the PAN card. Here I would be sharing my personal experience about how I got it corrected for my wife.
My wife's last name was misspelt and was broken into three parts in the PAN database. The steps involved the correction of the name in PAN, followed by the movement of stocks to another demat account and back to Zerodha. We came back to Zerodha due to the trust factor and their excellent interface.
Correction of name in PAN
This was the easiest thing. We had to fill the forms online with the corrected name, attach proofs and send them to Protean. You may be able to e-authenticate if the name matches in Aadhaar but that was not the case with us. We only had initials in Aadhaar for the second name. The correction was done in around two weeks.
Attempt to correct name in demat account
Her account was with Zerodha and we tried submitting the account modification form and KYC, Annexure B, new PAN and address proof as outlined here. However, the request was promptly rejected as they considered it a major change and requested a gazette notification for a name change or passport to be submitted. Our attempts to make them understand that ours was a name correction and not a name change were unsuccessful. That is when I sought advice from Manmohan whom I know through the ever-helpful AIFW community. He was quick to point out that these attempts would be futile based on his multiple experiences and suggested that I move my demat account elsewhere and come back to Zerodha later if necessary. Another suggested option was to transfer the holdings to my account temporarily, close the Zerodha account and move the holdings back to a new account - this will have to be backed by documentation.
Transfer to Shoonya
The search for a broker equivalent to Zerodha began and I zeroed down to Shoonya by Finvasia. We invest only for the long term and zero brokerage was a must. Zero charges for account opening would be nice and Shoonya fit the bill. The account opening process was online and it took about a week to activate the account. We took the CDSL Easiest route to transfer all the holdings to the Shoonya account and had to bear the transaction charges of 0.03% of the transfer value or ₹25 per ISIN, whichever is higher, + 18% GST. This was the only option (and not closure cum transfer which would have been free) since the names were different in both accounts.
We continued investing through the new account and the experience was largely good. However, the interface was not great and we did not like a few aspects like the requirement of separate logins for back office and reporting sites. Adding to it, those sites were not protected by 2FA either.
Back to Zerodha
In the meantime, Zerodha had made account opening free which started attracting me towards them again. One fine day, I took the plunge and got my wife to open the Zerodha account. Unlike Shoonya, the process was quick and we could operate the account in ~48 hrs. I believed that I would have to again take the CDSL Easiest route to transfer holdings back to Zerodha as I did not want to get a CMR copy and courier it to the Finvasia office. This used to be the process earlier and account closure cum transfer would be free. My understanding was that Shoonya did not offer an online option for this procedure. But while looking around in Shoonya, I discovered that they offer this option online. In fact, CDSL mandates all their brokers to do so. Elated by this discovery, we triggered the closure cum transfer process and that took about ten days to complete.
So with some back and forth, we finally have the correct name in the demat account thereby reducing any risk in the future.
I am in the same scenario now, my broker is Axis direct, I am trying to edit my name in demat but to no veil, their b.s. system did not allow me to change the name during account creation and I understood that NSDL has added my name incorrectly and I updated my name in PAN but after requesting Axis Direct now they say that they cannot update the name as I have updated the PAN again after the account creation and now I have to submit my name in Gazette. I am trying to explain the issue that due to their own systems I am unable to update during account opening but they are again and again telling me the same thing. I am fed up with them and thinking to do a same kind of maneuver like you mentioned but transferring of shares is not worth to spend.
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