Retail Direct Scheme Incorporated by RBI

RBI makes several rules for the management of the financial system. It also controls the banks in India and helps them contribute positively to the nation’s economy. Similarly, RBI also thinks about the welfare of investors in India via its policies.

Retail Direct Scheme - Overview

For example, the Retail Direct Scheme launched by RBI facilitates investors in India to invest in government securities. In addition, the government of India often seeks debt from individual investors for daily operations, public/military projects, and many other things.

Before the Retail Direct Scheme launch, people used to depend on intermediaries to invest in government securities. As a result, it increased the time taken to invest in government securities as investors had to go through mediators. RBI understood the underlying problem and launched a dedicated scheme 12th of July 2021.

The Retail Direct program allowed investors across the country to open gilt accounts with the central bank. By doing so, investors can invest in government security without any intermediatory. Read on to know more about the Retail Direct program launched by RBI.

Retail Direct Scheme Characteristics

The main characteristics of the Retail Direct program in India are as follows:

• An RDG (Retail Direct Gilt Account) has to be opened by an investor with the central bank under the Retail Direct Scheme.
• A gilt account is specifically opened for holding government securities over time. Instead of money, you will deposit/withdraw treasury bills or any other type of government security via a gilt account. Besides an individual, an entity in India can also open a gilt account.
• The main objective of the Retail Direct program is to decentralise the control for dealing in government securities. Earlier, investors had to go through several banks for buying government securities. At present, any retail investor can deal in mutual funds, exchange-traded funds, or any other security.
• All the securities issued as stocks by the government fall under this scheme. One can deal in treasury bills, dated securities, sovereign gold bonds, state development loans, and other securities via the Retail Direct Scheme.

Retail Direct Scheme Scope

One should also know the scope of the Retail Direct Scheme, which is as follows:

• Investors will be allowed to open and maintain an RDG account with RBI.
• Investors will have access to any primary issuance for government securities.
• Investors will have access to NDS-OM, which is an online portal launched by RBI. It will help investors to track the government securities in the market.

Eligibility criteria for the Retail Direct program

The eligibility needed for the Retail Direct Scheme is as follows:

• You must have a savings bank account in India to open an RDG account.
• You need to have a registered PAN card for opening an RDG account.
• You need to have a valid email address and mobile number to open an RDG account.

In 2022, investors can easily invest in government securities with the aid of the Retail Direct Scheme. Know more about the Retail Direct program launched by the RBI.

FAQs on Retail Direct Scheme

Q.1. In the context of the Retail Direct Scheme, can a non-resident individual invest in Indian government securities?

In the context of the Retail Direct Scheme, A non-resident individual can invest in Indian government securities according to the Foreign Exchange Management Act.

Q.2.When was the Retail Direct Scheme OM portal launched by RBI?

RBI launched the Retail Direct Scheme OM portal in 2005.

Q.3. Can one open an RDG account online to benefit from the Retail Direct Scheme?

One can open an RDG account with RBI via the dedicated online portal to benefit from the Retail Direct Scheme.

Q.4. With regards to the Retail Direct Scheme, where are the securities launched by the government of India defined?

With regards to the Retail Direct Scheme, You can look at the Government Securities Act 2006 to know more about government-issued securities.

Q.5. Is the Retail Direct Scheme OM portal secured?

The Retail Direct Scheme OM portal launched by RBI is highly secured.