Originally announced in February 2021, the RBI’s new Scheme ‘RBI Retail Direct scheme’ has been finally launched now.
Context
Originally announced in February 2021, the RBI’s new Scheme ‘RBI Retail Direct scheme’ has been finally launched now.
About the Scheme
- The scheme allows retail investors to buy and sell government bonds online.
- It is a one-stop solution to facilitate investment in Government Securities by individual investors.
- This comprehensive scheme works through an online portal:
- Open and maintain a ‘Retail Direct Gilt Account’ (RDG Account)
- Access to primary issuance of Government securities
- Access to Negotiated Dealing System - Order Matching system(NDS-OM)
Background
- As part of continuing efforts to increase retail participation in government securities, ‘the RBI Retail Direct’ facility was announced in the Statement of Developmental and Regulatory Policies, for improving ease of access by retail investors through online access to the government securities market – both primary and secondary – along with the facility to open their gilt securities account (‘Retail Direct’) with the RBI.
What comes under government securities?
- Government securities, for this scheme, mean securities issued in the form of stock by credit to the SGL/CSGL account maintained with RBI as defined under Section 3(iii) of the Government Securities Act 2006.
- These include-
- Government of India Treasury Bills
- Government of India dated securities
- Sovereign Gold Bonds (SGB)
- State Development Loans (SDLs)
Possible benefits of this Scheme
- A common man can directly take a position in government securities (g-sec), considered to be the safest asset class a sovereign can offer.
- A safe, simple and direct channel for investment in government securities.
- India will only be the third nation in the world after the United States and Brazil where retail participants can take direct exposure to the government bond market.
