In a bid to encourage retail participation in the Government securities market place, the RBI has decided to provide on the net access to the government securities market place to retail investors. According to the Central bank’s “Statement on Developmental and Regulatory Policies” released just after the Monetary Policy Committee (MPS) meet today, retail investors would be permitted on the net access to each major and secondary government securities market place.
The RBI would quickly release information of the proposed facility for retail investors.
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Retail Direct account
The retail investors will also get an alternative to open their gilt securities accounts with the RBI, according to the statement.
“Allowing Retail Investors to Open Gilt Accounts with RBI Encouraging retail participation in the Government securities market has been the focus area of the Government of India and the RBI. Accordingly, several initiatives viz. introduction of non-competitive bidding in primary auctions, permitting stock exchanges to act as aggregators/facilitators for retail investors and allowing odd-lot segment in the NDS-OM secondary market, have been taken in the past,” the RBI noted.
“As part of continuing efforts to increase retail participation in government securities and to improve ease of access, it has been decided to move beyond aggregator model and provide retail investors 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. Details of the facility will be issued separately,” the statement stated.
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What are gilt funds?
Gilt funds are generally debt funds that invest mostly in government securities. They come with no danger of non-payment of interest or principal quantity.
On behalf of the government, RBI concerns gilt funds for investors. They come in varying maturities. Investing in gild mutual funds is viewed as to be secure by specialists. With the new facility, retail investors would be in a position to straight invest in such securities.