TL;DR: Correct PAN first. If your broker rejects a demat name correction, transfer holdings (CDSL) to another broker, fix the name, then transfer back. Expect transfer fees and 10–14 day turnaround for transfers.

Brokers fetch account-holder names from the PAN database; sometimes that entry differs from the name printed on the PAN card. Here’s how I corrected my wife’s name.

My wife’s last name was misspelt and was broken into three parts in the PAN database. The steps involved the correction of the name in PAN, followed by the movement of stocks to another demat account and back to Zerodha. We returned to Zerodha because of trust and a better interface.

Correction of name in PAN

PAN correction was straightforward and completed in ~2 weeks. We had to fill the forms online with the corrected name, attach proofs and send them to Protean. You may be able to e-authenticate if the name matches in Aadhaar but that was not the case with us. We only had initials in Aadhaar for the second name.

Attempt to correct name in demat account

Her account was with Zerodha and we tried submitting the account modification form and KYC, Annexure B, new PAN and address proof as outlined here. However, the request was promptly rejected as they considered it a major change and requested a gazette notification for a name change or passport to be submitted. Our attempts to make them understand that ours was a name correction and not a name change were unsuccessful. That is when I sought advice from Manmohan whom I know through the ever-helpful AIFW community. He was quick to point out that these attempts would be futile based on his multiple experiences and suggested that I move my demat account elsewhere and come back to Zerodha later if necessary. Another suggested option was to transfer the holdings to my account temporarily, close the Zerodha account and move the holdings back to a new account - this will have to be backed by documentation.

Transfer to Shoonya

The search for a broker equivalent to Zerodha began and I zeroed in on Shoonya by Finvasia. We invest only for the long term and zero brokerage was a must. Zero charges for account opening would be nice and Shoonya fit the bill. The account opening process was online and it took about a week to activate the account. We took the CDSL Easiest route to transfer all the holdings to the Shoonya account and had to bear the transaction charges of 0.03% of the transfer value or ₹25 per ISIN, whichever is higher, + 18% GST. This was the only option (and not closure cum transfer which would have been free) since the names were different in both accounts.

We continued investing through the new account and the experience was largely good. However, the interface was not great and we did not like a few aspects like the requirement of separate logins for back office and reporting sites. Additionally, those sites lacked 2FA.

Back to Zerodha

In the meantime, Zerodha had made account opening free which started attracting me towards them again. One fine day, I took the plunge and got my wife to open the Zerodha account. Unlike Shoonya, the process was quick and we could operate the account in ~48 hrs. I believed that I would have to again take the CDSL Easiest route to transfer holdings back to Zerodha as I did not want to get a CMR copy and courier it to the Finvasia office. This used to be the process earlier and account closure cum transfer would be free. My understanding was that Shoonya did not offer an online option for this procedure. But while looking around in Shoonya, I discovered that they offer this option online. In fact, CDSL mandates all their brokers to do so. Elated by this discovery, we triggered the closure cum transfer process and that took about ten days to complete.

So with some back and forth, we finally have the correct name in the demat account thereby reducing any risk in the future.

Key takeaways

Fix PAN first; use CDSL transfer if a broker rejects name correction; expect fees and ~10–14 days per transfer.