Question: Consider the following statements regarding Retail Direct Scheme of RBI:
i) Through RBI’s Retail Direct scheme, a retail investor will be able to bid in G-Secs auctions and buy them in the secondary market as well.
ii) Retail investors will need to open and maintain a Retail Direct Gilt Account (RDG Account) with RBI to access its G-Sec platform.
iii) NDS-OM platform is RBI’s platform for buying and selling G-Secs and other money market instruments in the secondary market.
Which of the above statements are correct?
a) i and ii
b) iii
c) i,ii,iii
d) ii,iii
Ans: c
Context
- In one of its recent notification RBI has decided to let retail investors directly buy and sell government securities (G-Secs) on its platform.
Facts
- Through RBI’s Retail Direct scheme, an investor would be able to bid in G-Secs auctions and buy them in the secondary market as well.
- Retail investors will need to open and maintain a Retail Direct Gilt Account (RDG Account) with RBI to access its G-Sec platform.
- Investors can open the account through an online portal (RBI Retail Direct portal) meant for retail investors.
- Through the portal, Retail investors can access the auctions and the NDS-OM platform — the RBI platform for buying and selling G-Secs and other money market instruments in the secondary market.
- To open an RDG Account, a retail investor should have a savings bank account, PAN (Permanent Account Number), KYC (Know Your Customer) documents, a valid email address and a mobile number. The RDG account can be held either by one person or jointly.
- Only those non-residents retail investors eligible to invest in G-Secs will be allowed to open the RDG Account.
About G-Secs
- Government securities are government debt issuances used to fund daily operations, and special infrastructure and military projects.
- They guarantee the full repayment of invested principal at the maturity of the security and often pay periodic coupon or interest payments.
- They are considered to be risk-free as they have the backing of the government that issued them.
By kameshwar shukla