RBI launches Retail Direct Scheme for retail individual investors to buy G-secs
- Prime Minister Narendra Modi has launched the Reserve Bank of India-Retail Direct (RBI-RD) Scheme of RBI on November 12, 2021. Under this, the retail investors (general public/individuals) can buy/sell government securities in both primary and secondary markets.
- Objective: The Scheme aims to provide a safe, simple, direct and secured platform to investors for trade of Government securities.
- Before this, institutional investors (like banks, insurance companies) could trade in government securities. But with the launch of RBI-RD Scheme, retail investors can also trade in government security directly, using the online portal (https://rbiretaildirect.org.in) developed by the Reserve Bank of India.
- Retail Direct Gilt (RDG) Account: To trade in G-secs the retail investors will have to open a Retail Direct Gilt (RDG) Account with RBI after which they can make investments in the Government security market via the following routes:
- Primary issuance of government securities: Investors can place bid as per the non-competitive scheme for participation in primary auction of government securities and procedural guidelines for SGB issuance.
- Secondary market: Investors can buy and sell government securities on NDS-OM (‘Odd Lot’ and ‘Request for Quotes’ segments).
- The Payments for investment in Government Security can be done using saving bank account (which can be linked with RDG Account) through internet banking or Unified Payments Interface (UPI).
- RBI will not charge any fee for opening and maintaining the ‘Retail Direct Gilt account’ from the customers.
Points to remember:
- Name of the scheme launched by RBI to provide a safe, simple, direct and secured platform to investors for trade of Government securities?
- Which type of account will retail customers have to open with RBI to trade in Government security?- Retail Direct Gilt (RDG) Account
- Fees for opening of Retail Direct Gilt (RDG) Account with RBI for retails customers?- Nil
Source: RBI