The Reserve Bank of India launched the RBI Retail Direct Facility scheme on July 12, 2021.
What Is Retail Direct Scheme?
The RBI’s Retail Direct scheme is a one-stop solution to facilitate individual investors to invest in government securities (G-Sec). Under this scheme, retail investors will have the facility to open and trap Retail Direct Gilt Account (RDG Account) with RBI. The facility was launched as part of ongoing efforts to increase retail participation in government securities. The launch of the scheme was announced by the RBI in its Statement of Developmental and Regulatory Policies on February 5, 2021. It was launched to improve the ease of access of retail investors through online access to the primary and secondary government securities market. The implementation date of the scheme has not been announced yet.
Features Of The Scheme
Under this scheme, retail investors (individuals) will have the option to open and maintain a Retail Direct Gilt Account (RDC Account) with the RBI. An RDC account can be opened using the online portal provided for this scheme. The online portal will also provide facilities such as access to NDS – OM, a primary issue of government securities and registered users. No fee will be charged for opening and maintaining an account with RBI.
What Is G-Sec?
G-Sec is a loan instrument issued by the government for borrowing money. These tools are not tax free. They are the safest form of investment because they have the support of the government. The risk of defaulters dealing with government securities is almost zero. However, they are subject to fluctuations in interest rates.
It can be issued for the following periods:
Treasury Bills for Short Term – 91 Day, 182 Day and 364 Day