ISIN is a necessary component of Demat.

Answer: The statement is justified.

ISIN (International Securities Identification Number) is a unique 12-character alpha-numeric code allotted to each security (each class/type of share or debenture of each company) that is admitted to the depository system. In India it is allotted by NSDL (and by the RBI for government securities).

• Securities held in demat form have no distinctive numbers, so ISIN is used to identify them.
• Every demat request, transfer, pledge and settlement is processed using the ISIN.
• It ensures uniformity in identification of securities across the world, which helps in cross-border trading.
• A security cannot be dematerialised or held in a demat account unless an ISIN is allotted to it.

Therefore ISIN is a necessary component of the demat system.