In February this 12 months, the Reserve Bank of India (RBI) had mentioned that it could permit retail buyers to straight purchase and promote authorities securities (G-Secs) on its platform. Through RBI’s Retail Direct scheme, an investor would have the ability to bid in G-Secs auctions and purchase them within the secondary market as properly.
On Monday, the central financial institution issued particulars of the scheme. According to the notification, retail buyers might want to open and preserve a Retail Direct Gilt Account (RDG Account) with RBI to entry its G-Sec platform.
No price can be charged for opening and sustaining The RDG Account.
Investors can open the account by an internet portal (RBI Retail Direct portal) meant for retail buyers. RBI is but to present particulars of the portal.
Using the portal, Retail buyers can entry the auctions and the NDS-OM platform — the RBI platform for purchasing and promoting G-Secs and different cash market devices within the secondary market.
RBI is but to launch the scheme. According to the notification, “the date of graduation of the scheme can be introduced at a later date”.
SECURITIES AVAILABLE FOR TRADE
Once the scheme is launched, retail buyers should purchase and promote Treasury Bills, G-Secs, Sovereign Gold Bonds and State Development Loans.
ELIGIBILITY
To open an RDG Account, a retail investor ought to have a financial savings checking account, PAN (Permanent Account Number), KYC (Know Your Customer) paperwork, a sound e mail handle and a cellular quantity. The RDG account could be held both by one individual or collectively.
Only these non-residents retail buyers eligible to spend money on G-Secs can be allowed to open the RDG Account.
PROCEDURE
After registering on the net portal, retail buyers might want to authenticate themselves through the use of OTP (one-time password) acquired on their registered cellular quantity and e mail handle. They might want to submit the KYC doc to open the RDG Account.
BUYING AND SELLING
During the bidding, the participation and allotment of securities can be as per the non-competitive bidding scheme of the RBI. The regulator has designed the non-competitive bidding scheme for non-institutional small consumers.
Once buyers make the funds, RBI will credit score the securities to their RDG Accounts.
To purchase and promote securities within the secondary market, the process is much like shopping for and promoting of shares.
Before the beginning of buying and selling hours or throughout the day, the investor should switch funds to the designated account of CCIL (Clearing company of NDS-OM) on-line.
Based on precise switch, a funding restrict (shopping for restrict) can be given to the investor for putting ‘buy’ orders. At the tip of the buying and selling session, any extra funds can be refunded.
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