Dematerialization and Rematerialization

A process by which paper certificates of an investor are taken back by the company (or Registrar) and equivalent number of securities is credited in electronic holdings of the same investor is called dematerialization. This is to avoid problems of the paper certificates such as mutilation of share certificates, forged certificates etc. Depository discharges the function of providing the paperless electronic or dematerialized security transactions. A bank is called depository where the securities are held in electronic form.
Re-materialization is the conversion of electronic holding to papers by printing of new share certificates.