RBI Retail Direct' scheme

• RBI on Monday (12 July) announced the ‘RBI Retail Direct’ scheme
• The scheme will serve as a one-stop solution to facilitate investment in government securities (G-secs) by individual investors.
• No fee will be charged for opening and maintaining ‘Retail Direct Gilt account’ with the RBI.

Key points:

• Under the ‘RBI Retail Direct’ scheme, retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with the RBI.
• A "Gilt Account" means an account opened and maintained for holding Government securities
• The scheme has been launched as part of the RBI's ongoing efforts to increase retail participation in government securities
• It was announced in February 2021 for improving ease of access by retail investors through online access to the government securities market – both primary and secondary -

• It also provides facility to open gilt securities account ('Retail Direct') with the RBI.
• Retail investors will need to open a RDG Account with RBI to access its G-Sec platform.
• Registered investors could also use the online portal to access to primary issuance of government securities, as well as access to NDS-OM (Negotiated Dealing System - Order Matching system).
• NDS-OM refers to RBI's screen-based, anonymous electronic order matching system for trading in government securities in the secondary market.
• Retail investors will need following things to participate in the scheme:

1. A rupee savings bank account maintained in India,
2. PAN or any officially valid document for KYC purposes
3. A valid email id and mobile number to register under the scheme and maintain a RDG account.

• Non-resident retail investors, eligible to invest in government securities under Foreign Exchange Management Act, 1999, can also avail of the scheme.
• RDG account can be opened singly or jointly with another retail investor

• Government securities will include:

1. Treasury bills,
2. Dated securities,
3. Sovereign gold bonds (SGBs), and
4. State development loans (SDLs).

What is a retail investor?

• Retail investors are sometimes also called individual investors or retail traders.
• These are non-professional investors who purchase assets such as stocks, bonds, securities, mutual funds, and exchange traded funds (ETFs).
• They are only able to make these purchases by going through another party such as a brokerage firm or other financial professional.