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RBI Retail Direct Scheme

RBI’s Retail Direct Scheme:

The Reserve Bank of India (RBI) announced the ‘RBI Retail Direct’ Scheme.

  • In February 2021 RBI proposed to allow retail investors to open gilt accounts with the central bank to invest in Government securities (G-secs) directly.
  • Under the scheme, retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with the RBI.
  • Retail Investor is a non-professional investor who buys and sells securities or funds that contain a basket of securities such as mutual funds and Exchange Traded Funds (ETFs).
  • A Gilt Account can be compared with a bank account, except that the account is debited or credited with treasury bills or government securities instead of money.
  • RDG accounts can be opened through an online portal provided for the purpose of the scheme.
  • The online portal will give registered users access to primary issuance of G-secs and access to Negotiated Dealing System-Order Matching system (NDS-OM).
  • The RBI introduced the NDS-OM in August 2005. It is an electronic, screen based, anonymous, order driven trading system for dealing in G-secs.
  • It is a one-stop solution to facilitate investment in G-secs by individual investors.
  • RBI seeks to democratize the ownership of government debt securities beyond banks and managers of pooled resources such as mutual funds.

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