Can the process of crediting dividends and bonus shares to bank accounts and Demat accounts be considered reliable?

Investing 💰
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As a small-scale investor, I’ve never been too worried about whether those 8 or 15 rupee dividends actually make it to my bank account.

For me, as a casual investor in the stock market, my main focus is on the overall growth of my investments, not on how dividends or bonus shares are handled.

So, how well does the system actually work when it comes to crediting dividends and additional bonus or split shares?

  1. Can we trust the process for dividends and bonus shares? In other words, do individual investors really need to keep an eye on whether these payments and additional shares come through?

  2. Do fund managers and PMS firms, since they manage large investments, have special teams dedicated to checking that dividends and bonus shares are credited properly? Is it so seamless that they don’t need to double-check everything with extra staff?

I’m looking for someone with experience in this area, especially in how our current systems handle dividend processing and bonus splits. If you could spare a few minutes to share your thoughts, it would mean a lot to us everyday retail investors.

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Hi @Brishide Well this is a valid question, but in this case you will have to trust the process set by regulators regarding same.

On both the cases you mentioned, be it dividends or bonus shares - they are corporate actions that are enacted by the company and implemented by the RTA. These processes required company actions like - board, investors or shareholder approvals; post that they are filed with exchanges by the companies as listing disclosures and same information are available in public domain and also usually emailed by the companies to you.

As an market participant or intermediary, at Dhan we help you track corporate actions that are happening across the markets, stocks you track in watchlists and also ones you own in portfolio. Similarly for dividends, we help you track them on Dhan - however in both cases the actions are managed by the company RTA. In case you have queries about any particular company about its dividends or bonus shares - you can connect with the RTA of the company and/or the Company Secretary who is responsible for these.

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Thank you for taking the time to write your insights.

I believe you looked at this topic like a stockbroker and missed the main point. The focus wasn’t really on dealing with responsibilities. I understand that these RTA functions are not part of a stockbroker’s everyday tasks.

I was curious to see how a large investor or someone in a similar job would talk to another shareholder, someone in the same situation.

  1. Is our system of giving dividends and bonus shares foolproof? Once investors put their money in, do they have to keep track of every dividend announcement, bonus, or stock split? Should they check to see if these credits are really happening at the bank end or in their demat?

  2. This was mentioned in the discussion.

Thanks.