Retail Direct Scheme

15th November, 2021 Economy

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Context:

Prime Minister Narendra Modi on Friday launched two customer-centric initiatives of the Reserve Bank of India (RBI) — the RBI Retail Direct Scheme and the Integrated Ombudsman Scheme.

The scheme allows retail investors to buy and sell government securities (G-Sec) online, both in the primary and secondary markets.
these small investors can now invest in G-Secs by opening a gilt securities account with the RBI.
The account opened will be called Retail Direct Gilt (RDG) Account.

Participation and allotment of securities will be as per the non-competitive scheme.
Only one bid per security is permitted.
On submission of the bid, the total amount payable will be displayed.
Payment to the aggregator/receiving office can be made through using the net-banking or UPI facility from the linked bank account.

Building an Atmanirbhar Bharat: So far, in the government securities market, small investors class, salaried class, small traders had to invest through banks and mutual funds in an indirect manner.
Improved Ease of Access: It will make the process of G-sec trading smoother for small investors therefore it will raise retail participation in G-secs and will improve ease of access.
Facilitate Government Borrowings: This measure together with relaxation in mandatory Hold To Maturity (securities that are purchased to be owned until maturity) provisions will facilitate smooth completion of the government borrowing programme in 2021-22.
Financialise Domestic Savings: Allowing direct retail participation in the G-Sec market will promote financialisation of a vast pool of domestic savings and could be a game-changer in India’s investment market.