Selling Stocks? Here's Why TPIN and OTP Verification Are Important

Digital trading speeds up transactions but demands stronger security. TPIN and OTP verifications are key authorisation steps that protect your investments and ensure compliance. This article explains how these processes work and why they matter for secure trading. The use of TPIN and OTP ensures double authentication and ensures the security of your holdings. TPIN generation and OTP verification process when used in trading means that your investments are well protected.

A TPIN is a unique 6-digit code generated and issued by your depository (CDSL or NSDL) to authorise the sale of securities from your Demat account.

Key Features of TPIN

• Issued once but can be regenerated if forgotten
  

• Remains valid until changed by the user
  

• Serves as an alternative to the POA (Power of Attorney) model used earlier
  

• Specific to CDSL-operated Demat accounts; NSDL uses a different authorisation flow

An OTP is a one-time password, typically valid for a short period (about 10 minutes), sent to your registered mobile number or email during the authorisation of a sell order.

When is OTP Used

• To confirm TPIN-based authorisation
  

• During high-risk actions like placing a sell order, initiating fund withdrawal, or modifying key account details
  

 

Earlier, brokers used a signed Power of Attorney (POA) to debit stocks from your Demat account during a sell transaction. This method was prone to misuse and led to regulatory concerns. To protect retail investors, CDSL introduced the TPIN-based system in 2020, offering:

• More control to investors
  

• Higher security
  

• Greater transparency

Completing a stock sale securely involves a multi-step TPIN and OTP verification process, as outlined below:

Step 1: Place a Sell Order via your broker’s platform

Step 2: Authorisation Request is redirected to CDSL

Step 3: Enter TPIN on the CDSL interface

Step 4: Receive an OTP on your registered mobile/email

Step 5: Enter OTP to complete the verification

Step 6: CDSL approves the debit of shares from your Demat account

Note: This authorisation is typically valid for the day or for a single transaction, depending on the broker.

TPIN and OTP verification offer multiple advantages that protect investors and streamline trading, including:

All retail investors with Demat accounts under CDSL who have not submitted POA are required to use TPIN and OTP for authorising sell transactions.

Exceptions

• Some platforms allow e-DIS (Electronic Delivery Instruction Slip) instead of TPIN
  

• Institutional investors or high-volume traders may use custodial services with alternate flows

Investors may face some common challenges with TPIN and OTP verification. Here are typical issues and their solutions:

Follow these simple steps to generate or reset your TPIN if you are a CDSL user:

1. Visit: https://edis.cdslindia.com
   

2. Enter your BO ID (16-digit Demat number)
   

3. Click ‘Generate TPIN’
   

4. TPIN will be sent via SMS and email

To protect your investments, follow these essential safety tips when using TPIN and OTP:

• Do not share TPIN or OTP with anyone
  

• Always access CDSL from official URLs
  

• Use a secure device and avoid public networks while trading
  

• Regularly update your mobile number and email with your broker

1. Log in to your brokerage/trading account (website or app).
   

2. Go to Account Settings → Security / TPIN setup (may also be under Profile).
   

3. Choose Set TPIN (or Change TPIN) and enter a secure numeric code — avoid obvious sequences or personal dates.
   

4. Re-enter the TPIN to confirm and save.
   

5. You’ll usually receive an OTP on your registered mobile/email — enter it to verify the TPIN.
   

6. Store the TPIN safely, don’t share it, and change it periodically if you suspect compromise.
   

Note: TPIN + OTP are used together to authorize sell orders; OTPs typically expire in 5–10 minutes.

TPIN and OTP verification is a necessary layer of security in today’s digital investing environment. They provide investors greater control over the securities held in their Demat accounts and protect against unauthorised transactions. While the extra step may seem minorly inconvenient, it offers significant benefits in terms of safety, transparency, and compliance.

This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.