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Economy
Pradeep Kumar

13/07/21 11:25 AM IST

'RBI Retail Direct’ scheme

In news

The Reserve Bank of India (RBI) announced the ‘RBI Retail Direct’ scheme, a one-stop solution to facilitate investment in government securities (G-secs) by individual investors.

Details
  • As per the central bank, 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.
  • “RDG account can be opened through an online portal provided for the purpose of the scheme.
  • The online portal will give registered users access to primary issuance of G-secs and access to NDS-OM. 
  • Encouraging retail participation in the Government securities market has been the focus area of the government of India and the RBI.
  • G-sec market — both primary and secondary — along with the facility to open their gilt securities account (retail direct) with the RBI.
G-sec market
  • The G-sec market is dominated by institutional investors such as banks, mutual funds and insurance companies.
  • These entities trade in lot sizes of Rs 5 crore or more.
  • So, there is no liquidity in the secondary market for small investors who would want to trade in smaller lot sizes.
  • In other words, there is no easy way for them to exit their investments.
  • Thus, currently, direct G-secs trading is not popular among retail investors.
Source: The Hindu,Indian Express

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