The RBI Retail Direct Scheme enables individual investors to participate in government securities and manage gilt accounts directly with the RBI. In the near future, the Reserve Bank plans to introduce a new mobile application, facilitating direct purchases of government bonds. This smartphone app, developed by the Reserve Bank of India (RBI), will simplify the process for ordinary individuals to invest in government securities. Through this app, investors will have access to Treasury bills, central and state government bonds, and other instruments. The primary objective is to encourage greater private investment in government bonds. Explore the article below for further insights into the RBI Retail Direct Scheme.
RBI Retail Direct Scheme 2024
The “RBI Retail Direct” program has been launched, offering a comprehensive platform for individual investors to facilitate their investments in government securities. Initially introduced in November 2021, this scheme is now enhanced with the introduction of an app. The Reserve Bank of India (RBI) designed the Retail Direct scheme as a unified solution aimed at simplifying the process for individual investors to engage in government securities investments.
RBI Retail Direct Scheme Details in Highlights
Scheme Name: RBI Retail Direct Scheme
Initiated by: Reserve Bank of India
Commenced: November 2021
Goal: To offer individual investors a convenient platform for accessing government securities.
Mode: Online
Advantage: Simplified purchase of Government Securities
Official Website: https://rbiretaildirect.org.in/#/
Features of RBI Retail Direct Scheme
The “RBI Retail Direct” initiative has been unveiled, offering individual investors a comprehensive portal for investing in government securities. This scheme enables participants to buy securities via primary auctions and engage in trading on the NDS-OM platform. To further improve accessibility, a mobile app for the Retail Direct portal is under development. This app will allow investors the convenience of buying and selling financial instruments anytime, anywhere, with its release anticipated shortly. Through the app, a wide array of government securities, including Treasury bills, state and federal bonds, as well as central government bonds, will be available for purchase. Meanwhile, retail investors can already access these investment opportunities through the scheme’s website.
Benefits of RBI Retail Direct Scheme
The advantages of the RBI Retail Direct Scheme include the following:
- Retail investors have the opportunity to create and manage a “Retail Direct Gilt Account” (RDG Account) with the RBI.
- An “Online Portal” dedicated to the scheme allows for the easy opening of an RDG account.
- Registered users will have access to the following features via the “Online Portal”:
- Access to primary issuances of key government securities
- Access to the NDS-OM platform.
Other benefits of RBI Retail Direct Scheme to investors
- Since its launch in November 2021, the RBI Retail Direct Scheme has enabled individuals to invest in government securities and maintain gilt accounts with the RBI. This initiative allows investors to acquire assets through primary auctions and engage in trading on the NDS-OM platform. Development is underway for a mobile version of the Retail Direct portal to further improve access. This app will enable investors to buy and sell securities anytime and anywhere, with its launch expected soon.
- Transactions can be seamlessly conducted using internet banking through the Unified Payments Interface (UPI), linked to a saved bank account. Support services for investors are readily available via email, a dedicated toll-free number (1800-267-7955, available from 10 am to 7 pm), and the portal itself. The scheme includes facilities for transaction and balance statements, nominations, the option to pledge or place a lien on securities, and the execution of gift transactions, all at no additional cost.
Scope of Retail Direct Scheme
The RBI Retail Direct program provides retail investors with extensive services in the government securities market through its online portal, including:
- Establishing and maintaining a “Retail Direct Gilt Account.”
- Securing access to the NDS-OM platform.
- Accessing primary issuances of government securities.
Eligibility Criteria for RBI Retail Direct Scheme
Prior to applying for the RBI Retail Direct Scheme, ensure compliance with the following eligibility criteria:
Possession of an Indian Rupee savings bank account
Possession of a PAN (Permanent Account Number)
Availability of an officially recognized document for KYC (Know Your Customer), including Aadhaar, Passport, Voter ID, etc.
Presence of a valid Email ID
Possession of a valid mobile number
The RBI Retail Direct Gilt Account can be established in either single or joint holding mode. Additionally, non-resident retail investors are also eligible to participate in government securities investments.
Services Offered via the RBI Retail Direct Portal
Via the RBI Retail Direct Portal, retail investors have access to a variety of functionalities, including:
- Opening and managing a Retail Direct Gilt Account;
- Participating in G-sec auctions within the primary market;
- Investing in Sovereign Gold Bonds;
- Conducting bond transactions, both purchases and sales, in the secondary market;
- Utilizing features such as viewing account statements, making nominations, setting up pledges and liens, conducting gift transactions, and managing coupon payments.
Registration Procedure for RBI Retail Direct Scheme 2024
Here’s how the registration process works:
- Investors begin by filling out an online form on the website, verifying their identity with the OTP sent to their registered email and mobile number, and then submitting the form.
- The process of investor onboarding adheres to the RBI’s Know Your Customer (KYC) guidelines from 2016, which are updated periodically. Once registration is complete, a “Retail Direct Gilt Account” is established, and investors receive either an email or SMS detailing how to log in to the online portal.
- The RDG Account then becomes available for engaging in both primary and secondary market transactions via the NDS-OM platform.
Primary Market Participation
Participation in the primary auction of government securities and the issuance process for Sovereign Gold Bonds (SGB) is governed by a non-competitive method, which also determines the allocation of securities. Each security can receive only one bid, with the total amount due displayed at the time of bid submission.
Payment to the aggregator or receiving office can be made through one of two methods:
- Directly debiting the linked bank account using net-banking or UPI at the time of placing bids on the platform.
- Utilizing the UPI feature to temporarily block the required funds in the associated bank account at the time of bid submission; these funds will be debited only upon successful allocation in the auction. A similar banking service will be introduced in the future.
Should there be any refunds, they will be processed back to the investor’s bank account according to the aggregator’s defined timelines. On the settlement day, the allocated securities will be credited to the investors’ RDG Accounts.
Secondary Market Transaction —NDS—OM
The secondary market transaction feature on the online portal allows registered investors to buy and sell government securities via NDS-OM (odd lot segment/RFQ).
To Buy:
Payment can be made using one of the following options:
- Investors may use net banking or UPI to transfer funds from their linked bank account to the designated CCIL (Clearing Corporation of NDS-OM) account either before trading hours begin or during the trading day. A buying limit will be established based on the actual amount transferred or the confirmation of the transaction. Any funds remaining after the trading session will be returned to the investor.
- The UPI feature also allows for the temporary blocking of funds in the investor’s linked bank account at the time an order is placed; these funds will be debited on the settlement day. A similar banking service is planned to be introduced in the future.
- On the settlement day, any securities bought will be credited to the investor’s RDG Account.
To Sell:
- Securities earmarked for selling will be blocked from the time the sell order is placed until the completion of the trade.
- Funds from the sale will be credited to the investor’s linked bank account on the settlement day.
Non-Trade transactions – Value Free Transactions (VFT)
This initiative aims to facilitate transactions permitted under the VFT guidelines outlined by the RBI on November 16, 2018, subject to periodic revisions, specifically tailored for retail investors.
Investors are encouraged to utilize the web portal to fulfill these objectives.
FAQs:
- What is the RBI’s screen-based electronic order matching system for trading government securities in the secondary market referred to as?
The RBI’s screen-based electronic order matching system for trading government securities in the secondary market is known as NDS-OM. - What are the charges associated with opening a retail direct savings account?
The RBI does not levy any fees for establishing or maintaining a retail direct gilt account. - What does VFT stand for?
VFT stands for ‘Value Free Transactions.’
