The plain answer
A Power of Attorney (POA) is a legal document granting someone authority to act for you. In Indian demat accounts before 2020, brokers collected a POA from every client at account opening. That document gave the broker standing authority to debit shares from the client’s demat account for settlement, margin and corporate action purposes, without asking for a fresh authorisation on each transaction.
SEBI replaced that arrangement through its 2020 circulars. Today, demat debits run on the TPIN: a 6-digit code held only by the account holder and required for every debit. For stock exchange settlements and margin, brokers use the DDPI, a narrowly drawn instruction covering two enumerated purposes. The broad paper POA is no longer part of a standard account opening.
The change matters because the POA era inverted who controlled your securities. The broker held the authority and you saw the effects later, in a statement. The current design puts the authority in your hands at the moment of every debit.
What the POA was
Under Indian law, a Power of Attorney is a written instrument by which one person appoints another to act on their behalf. The instrument can be general, covering everything the principal could do, or special, limited to specific acts. The demat POA brokers collected sat firmly at the general end of that spectrum.
You signed the POA in favour of the broker, or a named official of the broker, as part of the account opening packet. From then on, the broker held standing authority to debit your demat account. When you sold shares, the broker instructed the depository participant to debit the quantity and the depository executed the debit on the strength of the POA. No code from you, no confirmation at the time of the trade, no per-transaction check.
The authority was not tied to a specific trade or a specific quantity. It covered debits generally, for settlement, for margin, for whatever operational need the broker invoked. And it lived in a paper document most clients signed once, filed once, and never re-read.
The system existed because settlement moves fast. On a sell, the exchange requires delivery of the shares within the settlement cycle, which for Indian equities has been the next working day (T+1) since January 2023. Asking every client to authorise every sell individually, on paper, would have ground the process to a halt. The POA solved the speed problem and created the control problem.
How the old system worked
It helps to see the old flow in full, because the risk lived in the gaps between steps. None of the steps below asked the account holder for anything at the time of the transaction.
- You sell 100 shares on the exchange
- The broker instructs the depository to debit your account, citing the POA
- The depository debits your account with no fresh check from you
- Shares move to the broker pool for settlement
- You see the debit later, in your monthly statement
The broker needed shares to settle, the depository had them, and the POA was the standing instruction that bridged the two. Your first sight of the debit came days later, in a statement, by which point the transaction was complete and the question of whether you had actually authorised that particular movement was buried in boilerplate.
The gap became visible in the margin framework. SEBI’s February 2020 circular on margin obligations noted that some brokers had misused inactive demat accounts, moving client securities on the strength of the POA. The circular’s central change: a POA held by a trading member or clearing member would no longer be treated as equivalent to the collection of margin against securities sitting in a client’s demat account.
Why SEBI replaced it
The regulator’s concern was asymmetry. The broker held a blanket authority evidenced by a paper document the client could not track. Every debit ran at the broker’s discretion, and the client’s only control was after-the-fact discovery in a statement.
SEBI’s February 2020 circular made the POA unusable as a margin mechanism. Brokers could no longer count client shares sitting in demat accounts as margin on the strength of a POA. Instead, clients had to pledge shares in the depository system, in favour of the broker, with the pledge itself recorded as a transaction. The changeover date moved twice, and circular SEBI/HO/MIRSD/DOP/CIR/P/2020/90 dated 29 May 2020 set the final date: 1 August 2020, when the pledge and re-pledge mechanism went live through NSDL and CDSL.
In June 2020, SEBI introduced the TPIN. The design inverts the POA: the authority stays with the account holder, every debit requires the holder’s 6-digit code plus an OTP, and the depository enforces the check at the debit itself rather than at the broker’s discretion. A broker holding a POA could debit and explain later. A broker facing a TPIN requirement cannot debit until you act.
The DDPI completed the replacement on the settlement side. Effective from 1 September 2022, SEBI’s DDPI guidelines made the limited instruction the successor to the POA for stock exchange delivery obligations and for pledging and re-pledging for margin. The POA, as a standard account opening document, was over.
The changeover, dated
The replacement happened in stages over 2020 to 2022. The dates below are the regulatory milestones; brokers migrated their flows as each one landed.
| Date | What changed |
|---|---|
| Before 2020 | POA signed at account opening; broker debits the demat account on its own instruction |
| February 2020 | SEBI margin circular: a POA with the broker no longer counts as margin; pledge through the depository instead |
| 29 May 2020 | Circular SEBI/HO/MIRSD/DOP/CIR/P/2020/90 extends the changeover; pledge and re-pledge go live 1 August 2020 |
| June 2020 | TPIN introduced: 6-digit code plus OTP authorises each demat debit |
| 1 August 2020 | Pledge and re-pledge mechanism operational through NSDL and CDSL |
| 1 September 2022 | DDPI guidelines effective; the DDPI replaces the POA for exchange settlements and margin |
| 18 November 2022 | DDPI scope widened to exchange-platform mutual fund transactions and tendering in open offers |
Two features of this timeline deserve note. First, the TPIN change was a behaviour change, not just a paper change: for the first time, selling shares out of a demat account required the holder’s active step. Second, the DDPI arrived only in 2022, which is why some brokers kept asking for POA-like documents in the interim and why old habits persisted for a while.
What you sign today
A standard online account opening today involves none of the old POA paperwork. The documents that actually matter:
| Document | What it does | Still used? |
|---|---|---|
| Account opening forms | KYC and account agreements, signed with Aadhaar e-sign | Yes, required |
| TPIN | Per-debit authorisation for demat debits | Yes, the current system |
| DDPI | Limited instruction for exchange settlements and margin | Optional; DIS or eDIS works instead |
| POA for demat debits | Blanket debit authority | No, replaced since 2020 |
Note the difference in the DDPI row: it is optional. You can sign it, or you can deliver securities yourself through a physical Delivery Instruction Slip (DIS) or the electronic version (eDIS) each time a settlement needs shares from your account.
Before signing anything an agent calls a “POA”, read what it authorises. The only documents a standard account opening needs are the KYC forms, the e-signature and the TPIN setup. Anything broader deserves a pause and a question.
The DDPI, explained
The Demat Debit and Pledge Instruction is the instrument SEBI designed as the POA’s successor, and it is deliberately small. SEBI’s guidelines limit the DDPI to two purposes: transferring securities from your demat account to meet delivery or settlement obligations arising from your own exchange trades, and pledging or re-pledging securities in favour of the trading member or clearing member to meet your margin requirements. Nothing else.
In October 2022 SEBI widened the scope, after representations from broker associations and depositories. From 18 November 2022, the DDPI also covers mutual fund transactions executed on stock exchange order entry platforms and tendering of shares in open offers through exchange platforms. Even with that widening, the instrument remains a closed list.
Three properties separate the DDPI from the old POA. First, the DDPI must be adequately stamped, which gives it a defined legal form instead of a loose letter. Second, it can be digitally signed, which fits the paperless account opening. Third, it is your choice: you may settle with a DIS or eDIS instead, a broker cannot compel you to execute a DDPI, and a broker cannot deny you services for declining one.
One more carry-over worth knowing: an existing POA signed in the old era remains valid until you revoke it. SEBI did not cancel old POAs by fiat; it made them irrelevant by moving the operative control to the TPIN and the DDPI. If you want one gone, you revoke it.
If you signed a POA years ago
If you opened your account before 2020, a POA may still sit in your account file. In practice, nothing depends on it anymore: the depository enforces the TPIN for demat debits, and the DDPI or DIS covers settlement and margin. The old paper is inert in the daily flow, but it is still a document in your name, and documents in your name deserve housekeeping.
- Check what is on file. Look in the app’s account documents section, or ask the broker’s support team what authority documents exist for your account.
- Ask for the TPIN flow. If the broker still references the POA for demat debits, ask for the TPIN-based or DDPI-based flow instead. Both are standard now.
- Revoke in writing if you want it gone. A POA is revoked by a written revocation delivered to the broker or depository participant. Keep a copy of the revocation and the acknowledgment.
None of this is urgent in the sense of money at risk today; the TPIN system already gates every debit. The housekeeping matters because a clean file makes future disputes shorter, and because a revoked document cannot be waved around in a scam.
What people usually get wrong
I need to sign a POA to open an account
The demat debit system runs on the TPIN, and settlements run on the DDPI or DIS. The POA era ended with SEBI’s 2020 circulars, and no standard account opening asks for one today.
A POA and a DDPI are the same thing
The DDPI covers two enumerated purposes: exchange settlement obligations and pledging for margin. The POA was general authority over the account. Conflating them is how unnecessary documents get signed.
The broker needs my TPIN to process a sell
You enter the TPIN yourself in the app at the moment of the sell. The broker cannot see it, and no genuine employee will ever ask you to share it.
Signing a DDPI is compulsory
It is optional. You can deliver securities with a DIS or eDIS each time, and a broker cannot refuse service because you declined a DDPI.
Questions people ask
No. For demat debits, the TPIN replaced the POA after SEBI’s 2020 circulars, and you set your 6-digit TPIN after opening so every debit is authorised by you. For stock exchange settlements and margin, brokers use the DDPI, a limited instruction you may sign instead of a POA. A standard online account opening today asks for your KYC details and an e-signature, not a POA.
A POA gave the broker broad, general authority over the demat account. A DDPI (Demat Debit and Pledge Instruction) is limited to two purposes: transferring securities to meet your own exchange settlement obligations, and pledging or re-pledging securities for margin. The names sound similar, but the DDPI is an enumerated instruction and the POA was a blanket authority.
Older POAs may still sit in your account file from the pre-2020 era, and under SEBI’s DDPI guidelines an existing POA remains valid until you revoke it. In practice the TPIN now governs demat debits, so the operative control is your TPIN, not the old paper. If a broker still relies on a POA for debits, ask for the TPIN-based flow or the DDPI instead.
No expiry, but you can and should reset it whenever you suspect it leaked. The reset runs through your registered mobile and email with OTP verification, so a reset is minutes of work. A leaked TPIN left in place is the dangerous state, not an old one.
No. Under SEBI’s DDPI guidelines, brokers and depository participants cannot compel you to execute a DDPI and cannot deny services because you refused one. You can settle deliveries yourself with a physical or electronic Delivery Instruction Slip (DIS or eDIS) instead.
Stop and ask what the document authorises. A standard demat account opening needs no POA: KYC forms, e-signature and TPIN setup cover it, with the DDPI as the optional settlement instruction. If someone insists on a document called a POA for demat debits, decline and check with the broker’s official support channel first.
Sources
- Securities and Exchange Board of India. “Legal framework — circulars.” Accessed 16 August 2026.
- National Securities Depository Limited. “NSDL Policy Circular NSDL/POLICY/2020/0075 — SEBI circular on implementation of provisions regarding pledge/re-pledge.” Accessed 16 August 2026.
- Zerodha Broking Ltd. “Update to CDSL’s TPIN authorisation process for selling stocks.” Accessed 16 August 2026.
- NDTV Profit. “Sebi clarifies on guidelines pertaining to instruction slips for share pledging.” Accessed 16 August 2026.