Securities mean shares, debentures, bonds, units of mutual funds, securities are held in physical form or paper form. Following are the problems/disadvantages of holding the securities in electronic form:
(i) Risk factor: Paper certificates can be lost, damaged, torn, stolen, or misplaced during transit, etc.
(ii) Efforts in Duplicating: If the original certificate is lost it becomes difficult to obtain duplicate certificates. It consumes time, effort, and money.
(iii) Delay in the allotment: Allotment of new securities in physical form requires a longer time.
(iv) Delay in Transfer and Transmission: Handling and recording physical certificates take a lot of time in the transfer and transmission of securities.
(v) Risk of Bad Delivery: Buying and selling securities can create problems if the certificates are torn, forged, etc.
