PM Modi launched RBI’s ‘Retail Direct Scheme’

PM Modi launched RBI’s ‘Retail Direct Scheme’

Team Ambitiousbaba and AB are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is PM Modi launched RBI’s ‘Retail Direct Scheme’

Prime Minister Narendra Modi has just launched the ‘RBI Retail Direct scheme’ in a virtual meet. The scheme would allow retail investors to buy and sell government bonds via online.  This scheme was announced by the Reserve Bank of India (RBI) in its February 2021 monetary policy. The portal is rbiretaildirect.org.in where buying and selling of government securities can be processed.

What is RBI Retail Direct Scheme?

Reserve Bank of India’s ‘Retail Direct Scheme’ is a scheme which permits retail investors for buying and selling government securities (G-sec) online in the primary and secondary markets. As per the information given by RBI, small investors can now chance to invest in G-Securities by opening a gilt securities account with the RBI. The opened account will be known as Retail Direct Gilt (RDG) Account.

Eligibility to open the RDG account:

As per the notification released by the RBI on July 12, 2021, a retail investor can open the RDG account if they have qualified for the following:

• Savings bank account maintained in India
• PAN Card issued by the Income Tax Department
• KYC document (Any official valid document such as Aadhaar, Voter ID)
• Valid email ID
• Registered mobile number

The RDG account can be opened singly or jointly with another retail investor who qualifies the eligibility criteria.

Charges for opening of RDG account:

As per RBI, There is no fee will be levied on opening and maintaining ‘Retail Direct Gilt account’. Even no fee or charges will be charged by the aggregator for submitting bids in the primary auctions. There is payment gateway charges which will be abided to the registered investor.

Other investor services:

• The online portal will offer to represent transaction history and balance status of securities holdings in the Retail Direct Gilt Account with its account statement which. All transaction alerts will be given through e-mail/SMS.
• A nomination facility will also be render to the registered investor. There is maximum two nominees options will be given.
• A retail investor can apply for a loan against the securities available in the RDG account.
• RDG account holder will be offered a facility to gift government securities to other retail investors.

Any query or grievances related to the scheme can be raised on the portal which is handled and resolved by the Public Debt Office (PDO) Mumbai of Reserve Bank of India.

Summary:

It is a good opportunity for retail investors to invest in government securities through the retail direct scheme which is offered by RBI. In India it is the first time when retail investors will have a chance for investing in government securities via simple and direct channel. The government securities extend a low risk and low return on the investment as compared to investment in equity or asset. Some investment Gurus has advised the retail investors must diversify their investment and go for this advantage to have a better and safe return.

Question & Answer:

Q1. What is G-Sec?

Ans. G-Sec or Government Securities are debt which is issued by the RBI on behalf of the Central Government (i.e. Government of India) or State Government.

Q2. Who launched the Reserve Bank of India’s retail direct scheme?

Ans. Prime Minister Narendra Modi

Q3. What is the minimum age for opening retail direct gilt account?

Ans. There are no criteria issued by RBI for this opening this account.

Q4. There is option to open RDG account jointly?

Ans. Yes. There is option to open RDG account singly or jointly.

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