The retail investors have been looking for assured returns and safety of capital and now have one more investment option.
The RBI on Monday opened a dedicated bond buying window called the Retail Direct Gilt(RDG) account for the retail investors using which they can now directly buy and sell government securities.
On Monday the Central Bank said that the retail investors would have the facility to open and maintain the RDG account with the RBI and the RDG accounts could be opened through an online portal provided for the purpose of the scheme.
RBI would not charge any fees for the maintenance of an RDG account. With the use of the RDG account, a saver could buy from the primary market, which was hitherto dominated by the mutual funds and other institutional investors. However the experts say that the retail participation might not bring a big change to the bond market and it was definitely one more safe investment option for the retail investors. Soumyajit Niyogi, the associate director at India Ratings said that the direct retail participation should give competition to the banks and other investment products.
In February this year, RBI had brought in the concept of RBI Retail Direct, which has become a reality now. The resident individuals who had a savings bank account, Permanent Account Number, KYC documents, a valid email address and a mobile number as well could open a RDG account.
The non-resident Indians could also open this account provided that they complied with the Foreign Exchange Management Act. The RBI said that the RDG account could be opened singly or jointly with another retail investor meeting the eligibility criteria.
On the registration at the online portal, the retail investors would need to authenticate themselves by using an OTP received on their registered mobile number and email address.
The retail investors could access the auctions using the portal and also the NDS-OM platform. Although the facility was yet to be launched and according to the notification the date of the commencement of the scheme would be announced at a later date.
On the launch of the scheme the retail investors could buy and sell Treasury Bills, G-Secs, Sovereign Gold Bonds and State Development Loans.
