‘RBI Retail Direct’ scheme- Highlights

Reserve Bank of India (RBI) introduced “RBI Retail Direct facility” scheme on July 12, 2021.

What is Retail Direct Scheme?

  • RBI’s Retail Direct Scheme is a one-stop solution to facilitate investment in Government Securities (G-Sec) by individual investors.
  • Under this scheme, retail investors will be provided a facility to open and maintain Retail Direct Gilt Account (RDG Account) with RBI.
  • This facility was launched as part of continuing efforts towards increasing retail participation in government securities.
  • Announcement to launch this scheme was made by RBI in Statement of Developmental and Regulatory Policies of February 05, 2021.
  • It was launched to improve ease of access by retail investors by online access to primary as well as secondary government securities market.
  • Date of implementation of scheme is not yet announced.

Features of the scheme

  • Under the scheme, Retail investors (individuals) will have the option to open & maintain ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
  • RDG Account can be opened using an ‘Online portal’ provided for the purpose of this scheme.
  • Online portal will also provide facilities to registered users like access to primary issuance of Government securities & access to NDS-OM.
  • No fee will be charged on opening and maintaining account with RBI.

What is G-secs?

G-secs are debt instruments issued by government to borrow money. These instruments are not tax-free. They are the safest form of investment because they are backed by government. Risk of default associated with g-secs is almost nil. They are however, subject to fluctuations in interest rates. It can be issued in-

  1. Short term- such a treasury bills for 91-days, 182-days and 364 days
  2. Long term- with bonds maturity of one year or more.

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