Need to popularise G-Secs among retail investors

Similarly, banks can make G-Secs available to their customers, through notices put up at their branches or on their websites so that people can put in their bids. The lot sizes for putting in the bids can be small since the aggregate of those bids is likely to be a reasonably large quantum.

What is being discussed here is nothing exotic; the website of a large private sector bank states that “ABC Bank offers facility of non-competitive bidding for dated government securities, through which customers can buy government securities directly from the RBI. Participation in the scheme of non-competitive bidding is now open to individuals, HUFs, firms, companies, corporate bodies, institutions, provident funds, trusts and any other entity prescribed by RBI. The investors bid either in terms of the rate of interest (coupon) for a new security or the price for an existing security being reissued.

All the information required, such as maturity date of the paper and the size of the auction and the type of the auction (price based or yield based), will be made available to the customers in the banks’ branches. You can participate in the non-competitive bidding by filling the application form, which is available at our branches. Also an undertaking from the investor that he is making a single bid only is necessary as per RBI guideline.”

ABC Bank takes a nominal charge of 6 paise per R100 as commission for rendering the service to the investors.

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