Do you know what is RBI Retail Direct Scheme and facilities available to individuals?

The Reserve Bank on Friday (12.11.2021) announced the activation of the RBI Retail Direct (RBI-RD) Scheme with effect from today. RBI-RD Scheme will bring G-secs such as Government of India Treasury Bills; Government of India dated securities; Sovereign Gold Bonds (SGB); and State Development Loans (SDLs), within easy reach of the common man by simplifying the process of investment. The Scheme aims to provide a safe, simple, direct, and secured platform to investors. Investors can buy securities using a savings bank accounts through internet banking or Unified Payments Interface (UPI). Retail Direct Investors’ will have an online facility to gift government securities to other Retail Direct Investors. Investor services include provisions for transaction and balance statements, nomination facility, pledge or lien of securities, and gift transactions. No fees will be charged for facilities like opening and maintaining accounts under the scheme or for aggregator (Aggregator / Receiving Office means Clearing Corporation of India Limited (CCIL) or any other entity as may be approved by RBI under the scheme) submitting bids in the primary auctions.

How does it work?

The ‘Retail Direct Gilt Account’ (RDG Account) with RBI can be opened using an online portal (https://rbiretaildirect.org.in). Investors can register on the online portal by filling up the online form and using the OTP received on the registered mobile number and email id to authenticate and submit the form. Instructions issued under RBI-Know Your Customer (KYC) Direction, 2016, updated from time to time, will be adhered to during the onboarding of the investors. Upon successful registration, ‘Retail Direct Gilt Account’ will be opened and details for accessing the online portal will be conveyed through SMS/e-mail.

The registered users can have access to the primary issuance of Government securities through the online portal. They will as well have access to the secondary market of Government securities through NDS-OM. Investments can be made using the following routes:

• Primary market: Investors can place bids as per the non-competitive scheme for participation in the primary auction of government securities and procedural guidelines for SGB issuance. Payment can be made through Net banking or UPI facility from the linked bank account, whereby funds will be debited at the time of submission of bids on the portal. Also, 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 a successful allotment in the auction. Similar facilities through banks will be made available in due course, RBI said. Refunds, if any, will be credited to the investor’s bank account as per the timelines specified by the aggregator. Allotted securities will be issued to the investors by credit to their RDG Account on the day of settlement.
• Secondary market: Investors can buy and sell government securities on NDS-OM (‘Odd Lot’ and ‘Request for Quotes’ segments). Before the 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 the 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. An investor can sell Securities identified for sale that will be blocked at the time of placing an order till the settlement of the trade. Funds from the sale transactions will be credited to the linked bank account on the day of settlement.

Requirements for opening an RDG account by an Individual:

The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria. Retail investors, as defined under the RBI Retail Direct scheme, can register under the Scheme and maintain an RDG Account, if they have the following:

•   Rupee savings bank account maintained in India;
•    Permanent Account Number (PAN) issued by the Income Tax Department;
•     Any OVD for KYC purposes;
•     Valid email id; and
•      Registered mobile number.

 Non-Resident retail investors eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 are eligible under the scheme.

Investors can obtain help and other support facilities on the portal itself and also through a toll-free telephone number 1800–267-7955 (10 am to 7 pm) and email.

Source: RBI website

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