In a bid to encourage retail participation in the Government securities market, the RBI has decided to provide online access to the government securities market to retail investors.
In a bid to encourage retail participation in the Government securities market, the RBI has decided to provide online access to the government securities market to retail investors. According to the Central bank’s “Statement on Developmental and Regulatory Policies” released after the Monetary Policy Committee (MPS) meet today, retail investors would be allowed online access to both primary and secondary government securities market.
The RBI would soon release details of the proposed facility for retail investors.
Retail Direct account
The retail investors will also get an option to open their gilt securities accounts with the RBI, according to the statement.
“Allowing Retail Investors to Open Gilt Accounts with RBI Encouraging retail participation in the Government securities market has been the focus area of the Government of India and the RBI. Accordingly, several initiatives viz. introduction of non-competitive bidding in primary auctions, permitting stock exchanges to act as aggregators/facilitators for retail investors and allowing odd-lot segment in the NDS-OM secondary market, have been taken in the past,” the RBI noted.
“As part of continuing efforts to increase retail participation in government securities and to improve ease of access, it has been decided to move beyond aggregator model and provide retail investors online access to the government securities market – both primary and secondary – along with the facility to open their gilt securities account (‘Retail Direct’) with the RBI. Details of the facility will be issued separately,” the statement said.
What are gilt funds?
Gilt funds are basically debt funds that invest mainly in government securities. They come with no risk of non-payment of interest or principal amount.
On behalf of the government, RBI issues gilt funds for investors. They come in varying maturities. Investing in gild mutual funds is considered to be safe by experts. With the new facility, retail investors would be able to directly invest in such securities.