RBI Retail Direct Scheme
The RBI Retail Direct Scheme was launched by Prime Minster Modi in November 2021. It aims to enhance the access to government securities market for retail investors.
What is RBI Retail Direct Scheme?
The scheme allows the retail investors to open and maintain their government security accounts (Gilt account) with the RBI free of cost. The accounts that are opened to maintain government securities are called gilt accounts. These accounts are similar to the bank accounts. However, in gilt accounts the treasury bills and government securities are debited and credited instead of money. The retail investors are non – professional investors. They buy and sell the funds and securities that consists of securities such as Exchange Traded Funds and mutual funds.
What is the significance of RBI Retail Direct Scheme?
When the direct retail participation is allowed in government securities market, the domestic savings are highly financed. The ease of government securities trading will help small investors. This will increase the retail participation in government securities. The RBI Retail Direct Scheme along with the relaxation in mandatory hold to maturity will help in completion of Government Borrowing Programme in 2021 – 22. Under the Government Borrowing Programme, the Government of India will borrow Rs 5.03 lakh crores from the market.
What is the eligibility to invest in RBI Retail Direct Scheme?
The retail investors should hold a savings bank account in India. They should also have Permanent Account Number (PAN) that is issued by the Income Tax Department. They should have a registered mobile number and a valid e – mail id. The non – resident Indians are also eligible to invest in the scheme. The Retail Direct Gilt account can be opened jointly or singly.
How is RBI Retail Direct Scheme different from current G – Sec Market?
Currently, the Government Securities market is dominated by the institutional investors. They are large market actors such as mutual funds, banks and insurance companies. Their size is Rs 5 crores or more. Therefore, there is not liquidity for the small investors. The primary market is the place where the securities are created. The secondary market are places where these securities are traded.
