(B) Depository — It acts like a bank, but instead of holding funds, it holds securities in electronic (demat) form in an account.
Source: Chapter 6, How is a depository similar to a bank?
The passage directly compares a Depository to a bank — a bank holds funds, while a depository holds securities in an account. Do not confuse a Demat Account (which is the account held within a depository) with the depository itself. The question asks about the institution, not the account.