The Reserve Bank of India Retail Direct Scheme was launched with an goal to offer the retail traders of the nation a easy, protected, safe direct entry to the Indian Government securities market.
In easy phrases, RBI Retail Direct has been formulated as a one-stop answer to facilitate funding in Government Securities by particular person traders.
The on-line portal makes it handy for the retail traders to put money into Central Government securities, State Government securities and Sovereign Gold Bonds by way of digital mode.
Why RBI Launched Retail Direct Scheme?
The traders within the Government securities (G-sec) market in India are principally establishments like industrial banks, co-operative banks, regional rural banks, provident funds, insurance coverage firms, pension funds, mutual funds and non-banking finance firms. Retail participation, i.e., participation by people within the G-sec market has been very restricted.
Promoting retail participation within the G-sec market is helpful to each the issuer and the investor. From the issuer‘s perspective, a diversified investor base for government bonds ensures stable demand for G-sec.
Further, a heterogeneous investor base with different time horizons, risk preferences, and trading motives ensures active trading, creates liquidity and allows the Government to raise borrowings at a reasonable cost. On the other hand, from the investors‘ perspective, it provides an alternative investment option with decent returns and capital protection.
What Are The Kinds Of Government Securities That I Can Invest In Through The RBI Retail Direct Platform?
1. Government of India Treasury Bills (T-Bills)
2. Government of India dated securities (dated G-Sec)
3. State Development Loans (SDLs)
4. Sovereign Gold Bonds (SGB)
What Is Government Security?
Government security (G-Sec) means a security created and issued by the Government for the purpose of raising a public loan or any other purpose as notified by the Government in the Official Gazette and having one of the following forms.
-A Government Promissory Note (GPN) payable to or to the order of a certain person; or,
-A bearer bond payable to a bearer; or
-A stock; or
-A bond held in a Bond Ledger Account (BLA).
Retail investors (individuals) have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
Retail Direct Gilt (RDG) Account means gilt account maintained within the books of RBI underneath the Retail Direct Scheme.
What Are The Benefits Of The Scheme?
Retail traders have the power to open and keep the ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
The investor can place non aggressive bids in Primary issuance of all Central Government securities (together with Treasury Bills and Sovereign Gold bonds) in addition to securities issued by numerous State Governments.
Under this scheme, the person can even entry the Secondary market by way of ‘NDS OM’ – RBI’s buying and selling system. The investor will mechanically obtain any curiosity paid/maturity proceeds into his linked checking account on due dates.
Eligibility: RBI Retail Direct Scheme
Retail traders, as outlined underneath the scheme, can register underneath the Scheme and keep a RDG Account, if they’ve the next:
i) Rupee financial savings checking account maintained in India;
ii) Permanent Account Number (PAN) issued by the Income Tax Department;
iii) Any OVD for KYC objective;
iv) Valid e-mail id; and
v) Registered cell quantity.
Non-Resident retail traders eligible to put money into Government Securities underneath Foreign Exchange Management Act, 1999 are eligible underneath the scheme.
The RDG account will be opened singly or collectively with one other retail investor who meets the eligibility standards.
How To Open RBI Direct Gilt Account?
RDG Account will be opened by way of an ‘Online portal (https://rbiretaildirect[Dot]org[Dot]in)’ supplied for the aim of the scheme. The ‘Online portal’ will even give the registered customers the next amenities:
- Mobile quantity linked to your Aadhaar
- Active Saving Bank Account with internet banking/UPI facility
- Signature picture of Account Holder(s)
- Original PAN Card (For Video KYC)
- Bank account quantity and IFSC code
- Address proof in case of tackle change
Other Instructions
- For Aadhaar primarily based KYC, please full Video Identification inside 3 days
- Please allow pop ups in your PC/Mobile
- Allowable file codecs are JPG, JPEG, PNG, and PDF and most file measurement 2 MB
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