RBI Retail Direct Scheme: The Centre's new project will give the opportunity to the general public to invest in government bonds
The RBI governor said the two projects would further expand investment in the country and make the use of capitalism much safer in terms of investment.
The central government has recently launched two new projects aimed at boosting the RBI's customer service and retail investment in the country's economy. In a virtual meeting on Friday, Prime Minister Narendra Modi formally inaugurated the two projects to the public. The two newly launched projects are dubbed ‘RBI Retail Direct Scheme’ and ‘Integrated Ombudsman Scheme’.
In addition to Prime Minister Narendra Modi, the virtual event was attended by Union Finance Minister Nirmala Sitharaman and current Reserve Bank Governor Shaktikanta Das. At the end of the program, the Prime Minister said that the investment sector in the country would be further expanded through the two projects and the use of capitalism in investment would be much safer.
It may be recalled that in February this year, the RBI announced the launch of the RBI Retail Direct Scheme to increase the participation of small investors in government securities (G-securities). The scheme allows retail investors to invest in government securities online. Investment services will be provided in both primary and secondary markets. According to a report by the Reserve Bank, under this scheme, small investors will be able to open a government securities account in their own name called 'Retail Direct Gilt Account' without paying any tax.
In July this year, according to a notification issued by the RBI, for small investors to open an RDG account, an Indian Savings Bank account, a PAN card issued by the Income Tax Department, any valid government document (Aadhaar card, Votar card, etc.), a Must have a valid email ID and a registered mobile number. RDG accounts can be opened individually or jointly with anyone who meets the above conditions.
This RDG account can be easily opened by registering in the online portal by filling up a form. After opening an account, retail investors will be able to buy bonds from the primary market (where government bonds have been introduced for the first time) or from the secondary market (where bonds already existed). According to the RBI, there is no separate fee for opening an RDG account. No separate fee will be charged even for arbitrators. Only the payment medium fees have to be borne by the investors themselves. There are also some more services for investors in RDG accounts. For example, the need to take a loan from the securities deposited in the account, the gift of G-securities in one's own account to another retail investor, a separate portal for reporting and inquiries about complaints and information, information on transactions and available balances in the account. Payment system and, last but not least, the registration facility for registered users.
Dr. Ravi Singh, President of ShareIndia and Head of Research Team, said that this is the first such initiative for retailers in India. For a safe return on investment, retail investors should not miss out on this much less risky investment opportunity than in the equity market. According to capital expert Ajit Dey, investing in Gilt is a lot like keeping cash in hand, investors can get money by selling it whenever they want. Now, time will tell how the retail investors will react to this new initiative of the government.
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