The Reserve Bank of India Retail Direct Scheme was launched with the objective of providing a simple, safe, secure direct access to the Government of India securities market to the retail investors of the country.
In simple words, RBI Retail Direct is designed as a one-stop solution to facilitate investment in Government Securities by individual investors.
The online portal makes it convenient for retail investors to invest in Central Government Securities, State Government Securities and Sovereign Gold Bonds through digital mode.
Why did RBI start the Retail Direct Scheme?
Investors in the Government Securities (G-Sec) market in India are mostly commercial banks, co-operative banks, regional rural banks, provident funds, insurance companies, pension funds, mutual funds and non-banking finance companies. Retail participation, ie participation of individuals in the G-Sec market has been very limited.
Encouraging retail participation in the G-Sec market is beneficial to both issuers and investors. From an issuer’s point of view, a diverse investor base for government bonds ensures steady demand for G-Secs.
Furthermore, a heterogeneous investor base with different time horizons, risk preferences and trading objectives ensures active trading, creates liquidity and allows the government to borrow at a reasonable cost. On the other hand, from the investors’ point of view, it provides an alternative investment option with good returns and capital security.
What are the types of government securities in which I can invest through RBI Retail Direct platform?
1. Government of India Treasury Bill (T-Bill)
2. Dated Securities of Government of India (Dated G-Sec)
3. State Development Loan (SDL)
4. Sovereign Gold Bond (SGB)
What is government security?
Government Security (G-Sec) means a security created and issued by the Government for the purpose of raising public debt or any other purpose, as notified by the Government in the Official Gazette and in one of the following forms.
Government promissory note (GPN) payable to or to the order of a specified person; Or,
– bearer bonds payable to a holder; Or
-stock; Or
Bonds held in Bond Ledger Account (BLA).
Retail investors (individuals) have the facility to open and maintain ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
Retail Direct Gilt (RDG) Account means the gilt account maintained in the books of RBI under the Retail Direct Scheme.
What are the benefits of the scheme?
Retail investors have the facility to open and maintain ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
Investors can make non-competitive bids in the Primary Issue of all Central Government securities (including Treasury Bills and Sovereign Gold Bonds) as well as securities issued by various State Governments.
Under this scheme, one can also access the secondary market through ‘NDS OM’ – the trading system of RBI. The investor will automatically receive any interest/maturity proceeds paid on the due dates in his/her linked bank account.
Eligibility: RBI Retail Direct Scheme
Retail investors, as defined under the Scheme, may register under the Scheme and maintain an RDG account, if they have the following:
i) Rupee savings bank account maintained in India;
ii) Permanent Account Number (PAN) issued by the Income Tax Department;
iii) any OVD for KYC purpose;
iv) valid email ID; And
v) Registered mobile number.
Non-resident retail investors eligible to invest in Government securities under the Foreign Exchange Management Act, 1999 are eligible under the scheme.
RDG account can be opened singly or jointly with any other retail investor who fulfills the eligibility criteria.
How to open RBI Direct Gilt Account?
RDG account can be opened through ‘Online Portal’ (https://rbiretaildirect.com)[Dot]Organization[Dot]in)’ provided for the purpose of the scheme. The ‘Online Portal’ will also provide the following facilities to the registered users:
- Mobile number linked to your Aadhaar
- Active Savings Bank Account with Net Banking/UPI facility
- Signature Image of Account Holder(s)
- Original PAN Card (for Video KYC)
- Bank Account Number and IFSC Code
- Address proof in case of change of address
other instructions
- For Aadhaar based KYC, please complete video identification within 3 days
- Please enable pop ups on your PC/Mobile
- Acceptable file formats are jpg, jpeg, png and pdf and maximum file size is 2MB
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