Now as a retail investor you can open an ‘RBI Direct’ gilt account

The Reserve Bank of India in its ‘Statement of Developmental and Regulatory Policies’ dated February 05, 2021 for improving ease of access by retail investors through 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. The Central banker on Monday in a circular said retail investors can open a ‘Retail Direct Gilt Account’ (RDG Account) through an ‘online portal‘for the above purpose.The scheme will be a one-stop solution to facilitate investment in G-Secs by individual investors, it said.

Under the ‘RBI Retail Direct’ scheme, retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with RBI through an online portal. The ‘online portal’ will give registered users the facilities of access to primary issuance of government securities (G-Secs) and NDS-OM (Negotiated Dealing System — Order Matching (NDS-OM).

The Government securities, for RDG account mean securities issued in form of stock by credit to SGL/CSGL account maintained with RBI as defined under Section 3(iii) of Government Securities Act 2006. These include:    Government of India Treasury Bills;    Government of India dated securities;    Sovereign Gold Bonds (SGB);    State Development Loans (SDLs).

Retail investors, as defined under the scheme, can register under the Scheme and maintain a RDG Account, if they have maintained Rupee savings bank account in India.They must have PAN and OVD for KYC purpose. The account holders also required to have valid e-mail address and registered mobile number. The account can be opened singly or jointly with another retail investor who meets above eligibility criteria. Non-Resident retail investors are eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 under the scheme.

Primary market participation:

Participation and allotment of securities will be as per the non-competitive scheme for participation in primary auction of government securities and procedural guidelines for SGB issuance.

Only one bid per security is permitted. On submission of the bid, the total amount payable will be displayed.

Payment for subscription:

Payment can be made through Net Banking/UPI facility linked to investor’s bank account at the time of submission of bids on the portal. In case of using UPI facility, funds in the linked bank account can be blocked at the time of submission of bids on the portal which will be debited from this account on successful allotment in the auction. Similar facility through banks will be made available in due course. Refund, if any, will be credited to the investor’s bank account as per the timelines specified by the aggregator.

Allotment of securities:

Allotted securities will be issued to the investors by credit to their RDG Account on the day of settlement

Secondary market transaction-NDS-OM:

Registered investors can access the secondary market transaction link on the online portal to buy or sell government securities through NDS-OM (odd lot segment/RFQ).

For secondary market purchase, the buyer can make payment before start of trading hours or during the day. The investor should transfer funds to the designated account of CCIL (Clearing Corporation of NDS-OM) using net-banking/UPI from the linked bank account. Based on actual transfer/success message, a funding limit (Buying Limit) will be given for placing ‘Buy’ orders. At the end of the trading session, any excess funds lying to the credit of the investor will be refunded.

Incase the investor intends to sell the securities; the identified securities for sale will be blocked at the time of placing order till the settlement of the trade. The funds received from sale transaction will be credited to the linked bank account on the day of settlement.

Fee and charges:    No fee will be charged for opening and maintaining ‘Retail Direct Gilt account’ with RBI.    No fee will be charged by the aggregator for submitting bids in the primary auctions.    Fee for payment gateway etc., as applicable, will be borne by the registered investor.

Registered investors can use the online portal for investor services such as Account Statement; Nomination facility; Pledge/Lien of securities; Gift Transactions; Grievance redressal etc.

The RBI, in its statement, said the date of commencement of the scheme will be announced at a later date.