Raghunandan Money – Investment Khushiyon Ka.

Understanding power of attorney and debit instruction slip – are they mandatory?

Published : October 10, 2018

Understanding Power of Attorney and Debit Instruction Slip – Are they Mandatory

To begin with, let me ask that how many of us have read between the lines in that long form that our broker gave us to sign on? Yea, those very initial documents that include your particulars, terms of services, other conditions and a power of attorney and debit instruction slip.

Not many read through all these documents with complete in-depth understanding and that is fine in most cases ‘only if’ you keep a catch of important or key powers that you are giving your broker to execute things on your behalf.

One of these key clause to understand is the power of attorney and debit instruction slip clause. In the stock market parlance for convenience, we call the power of attorney as POA and debit instruction slip as DIS.

Know power of attorney and debit instruction slip in demat account context

In our recent blog about Why every Indian must have a demat account, we mentioned the difference between a Demat and a Trading account & a Depository and a Depository Participant (DP). We open our demat account with a DP and a trading account with a Broker, in most cases, both DP and broker would be the same, however, they can be two different companies or firms too. You can only hold your securities in a demat, however, if you want to buy or sell or trade in securities you need a trading account. In case you still have any confusion around this, please have a quick look at our previous blog.

This blog is divided into eight key parts:

  1. What is a POA in the stock market?
  2. What is the applicability of POA in a Demat or Trading account?
  3. Is power of attorney and debit instruction slip mandatory or Voluntary?
  4. Know the advantages of POA?
  5. What are the disadvantages or shortcomings of POA?
  6. Why knowing the advantages of a DIS is a must?
  7. What are the disadvantages of a debit instruction slip?
  8. Which one is better for you if you are a Trader and an Investor? – DIS or POA?

Let’s get into the interesting stuff and begin understanding POA and DIS:

What is a POA in the stock market?

Power of attorney or POA is a legal document authorizing a person (or broker/DP) to execute transactions or operate your demat account on your behalf. The POA is a legally valid power or authorization that you give to your broker.

To make things clearer, POA is given to authorize a debit of online selling or delivery transactions of stocks or shares without any manual intervention.

What is the applicability of POA in a demat or trading account?

Thus in other sense, by executing or giving power of attorney (POA), you are authorizing a person to operate or manage your demat account.

POA is of two major types. One is a general POA wherein you give an umbrella POA without any restrictions. The second one is a specific POA wherein you authorize only certain clearly mentioned acts or type of transactions.

Also, further there is revocable POA wherein you can cancel the given POA at any given time.  There are non-revocable POAs as well that does not give you the power to refuse or cancel the given POAs.

Therefore, the next time you sign up for a trading account with your broker, don’t forget to enquire to know what all powers are you giving him to execute what all transactions with your demat or trading account.

Let us further understand as to whether giving POA is mandatory or it is up to you to decide the same?

Is power of attorney and debit instruction slip mandatory or Voluntary? 

The right-away answer to this questions is that POA is not mandatory. As discussed above although it’s not mandatory and says you have given POA because you were not aware of it earlier, you still can revoke it anytime as per your wish. You would also find your broker telling you that it is not mandatory to give POA however, it is suggested.

Now, how are you going to sell the stocks from your demat account through your trading account if you have not given any POA? This is where DIS (Delivery/Debit Instruction Slip) comes into the picture. So, if you have not given POA to your broker, you can still do any sell or delivery transaction by filling in and handing over a DIS to your broker. However, once you come out of the POA realm and enter the DIS world, you need to execute or fill in each DIS offline manually as this cannot be done online. The format of DIS is pre-fixed and you can always ask your broker for a DIS booklet. This DIS will then authorize your broker to debit the stocks from your demat account and sell or deliver them through your trading account.

Therefore, the bottom line is that POA is not mandatory because you can do your delivery transactions through a DIS issued to authorize your broker.

Know the advantages of POA?

1. Smooth online operations

Executing a transaction online through the comfort of your home or office as per your time is a lot easier than doing it offline. Also, the processing of transactions is smooth online as compared to offline processing. Therefore, in this case, POAs make it much simpler and smooth to operate and process the transactions. Therefore if you have signed a specific or limited purpose POA, you are going to save yourself from a lot of hassles.

2. Less time consuming

Once things go online, the manual execution hassles automatically go down. If you have given POA to your broker you no longer need to fill a DIS and handover or submit to your broker in time to execute a delivery transaction and thus save a lot of time that these tasks to take.

3. Saves on cost

Manually going up to your broker or even sending your DIS via courier to submit it involves cost along with time. And if in case you are unable to submit the DIS in time, you might have to suffer the penalty and other related costs of not delivering or completing with sells transaction on time.

What are the disadvantages or shortcomings of POA?

1. Unnecessary clauses added in the POA document

You need to be cautious here, any clauses taking powers from you beyond delivering or selling the securities are to be understood and enquired before you actually assign the POA. A lot of brokers would add unwanted clauses only to expand the umbrella of their powers.

2. Misuse of powers in the given POA

Many brokers or DPs would often misuse the powers in the POA like at times the broker may take the authority to even sign certain documents on your behalf and some brokers even deny services in case you refuse to sign a POA, which is completely incorrect as no services should be denied on such grounds.

3. Unwanted actions or transactions executed on our behalf

For example, executing trades without our consent, open an email account in our name and receive all important information directly, transfer of funds from our bank accounts to trade etc. are some of the actions that you would really want to be kept at bay from. These seldom but do happen if the POA document contains these clauses too.

Why knowing the advantages of a DIS is a must?

1. No dilution of control

The entire control remains in your hands. As you will not be given any powers to anyone to execute transactions. Or even make decisions on your behalf.

2. No debits or charges without your approval

Let us discuss the above. Some brokers or DPs misuse the powers given in POAs. They may misuse it to make certain debts in the name of recovering random or unknown charges. Sometimes they may use it to recover some costs from your account as well. This thus helps to avoid any such unknown auto debits.

What are the disadvantages of a debit instruction slip?

1. Cumbersome

The major drawback around DIS is the manual intervention and work involved. Filling in a slip, delivering it to your broker or handing it your broker is a cumbersome process. It is not so simple if you do it on a day-to-day basis.

2. Time-consuming

All of this takes time and efforts. While in the case of POA it’s a one time job. With you giving your POA to your broker. The broker will then automatically process the transaction each time on your behalf. POA enables him to do so without any hassle and also in no time.

3. Not suitable for multiple and frequent transactions

The more the number of transactions, the harder it gets to fill in, execute and keep a check. Check of all the DISs that you have issued.

Which one is better for you if you are a Trader and an Investor? –power of attorney or debit instruction slip?

Here is the important question and here is our answer on power of attorney and debit instruction slip. If you are an investor and do not deal frequently, DIS would be a better and safer choice. However, if you are a trader, DIS would be a lot of hassle for daily and multiple transactions. Therefore, just enquire well and go for POA. You can always do your own if(s) and but(s) before deciding. Remember you need to submit a DIS on the same day of selling your security. Else your security will go into auction!

A few words of caution for you:

  • Only sign a specific and revocable POA.
  • Be mindful of all the extra powers that your POA document is listing down and enquire from your broker.
  • Never give a blank signed DIS to your broker or anyone, its as good as a blank cheque.
  • Always ask for a copy of your submitted DISs and keep a record of it.

What’s more is we have experts with us. Experts waiting to assist you in finding a resolution to Demat Account and Demat related power of attorney and debit instruction slip questions. Get started right away and get the best advice, just click here for the best Demat account DP near you!


If you still have any questions and would like some professional help? Let our experts do the thing for you, just post your questions in the comment box below and our Expert Advisors shall reach out to you with the right answers soon!

About Author

No Comments

Search Blog by Product Name
Open a Zero Brokerage Account Zero Brokerage Plan
Want to Trade at Lowest Brokerage?

Enjoy flexible trading limits at lowest brokerage rates ?

Open Your Investments Account Now 0Account Opening Charges Life Time Demat AMC Brokerage

Open Demat & Trading Account Online in Just 5 Minutes

Apply Now

RMoney's Rewarding Rafer & Earn


Want a Personalised Advice on your portfolio ? Talk to our Market Experts for FREE.
Register Now for a FREE Call Back.


Filing Complaints on SCORES (SEBI) – Easy & Quick

  1. Register on SCORES Portal (SEBI)
  2. Mandatory details for filing complaints on SCORES:
    1. Name, PAN, Address, Mobile Number, E-mail ID
  3. Benefits:
    1. Effective Communication
    2. Speedy redressal of the grieva`nces



Your family deserves this time more than we do.

Share happiness with your family today & come back soon. We will be right here.

Investment to ek bahana hai,
humein to khushiyon ko badhana hai.


Customer Care


Looking to Start Algo Trading?

But Confused.

Don't worry, we hate spam as much as you do!

Please note that the brokerage charged against the above scheme should not in any ways exceed the amount as specified under the exchange bye laws.

  • Advance Brokerage is valid for Lifetime.
  • Balance Advance Brokerage can be refunded lifetime without asking any Question.
Send Enquiry
Open chat
RMoney India
Welcome to RMoney
More Info visit at https://rmoneyindia.com/power-of-attorney-and-debit-instruction-slip
How May I Help You?