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RBI unveils retail direct scheme

Topics Covered: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. 

RBI unveils retail direct scheme: 

Context: 

The scheme was recently launched by the RBI. 

  • Under the scheme, retail investors will be allowed to open retail direct gilt accounts (RDG) directly with RBI. 

 

How it operates/works? 

A dedicated online portal will provide registered users access to primary issuance of government securities and to Negotiated Dealing System-Order Matching system (NDS-OM). (NDS-OM refers to RBI’s screen-based electronic order matching system for trading in government securities in the secondary market). 

  • There will be no charge on account opening and its management. 

 

Objectives of the scheme: 

To improve the accessibility of government securities. 

Significance of the scheme: 

The scheme is a one-stop solution to facilitate investment in government securities (G-secs) by individual investors. 

 

Types of investments available for the users: 

  1. Government of India Treasury Bills. 
  2. Government of India dated securities. 
  3. Sovereign Gold Bonds (SGB). 
  4. State Development Loans (SDLs). 

 

Things you should know: 

  1. What are gilt accounts? 
  2. Who are retail investors? 
  3. What are G-secs? 

 

What is a Gilt Account? 

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. In other words, it’s an account for holding government securities. 

 

Who is a retail investor? 

A retail investor is someone who buys and sells equity shares, commodity contracts, mutual funds, or exchange traded funds (ETFs) through traditional or online brokerage firms or other types of investment accounts. 

 

What are G- Secs? 

Click here

 

Insta Curious: 

Do you know what Fine Paper is? Read Here

 

InstaLinks: 

Prelims Link: 

  1. What are G-Secs? 
  2. Short and long term securities. 
  3. Powers of the Centre and states to issue these instruments. 
  4. Role of RBI. 
  5. Factors which affect the prices of these securities. 

Mains Link: 

What are G-Secs? Why are they significant? Discuss. 

Sources: the Hindu.