MONEY
Retail investors can soon invest in primary and secondary gilt markets directly via RBI’s Retail Direct platform
- IBJ Bureau
- Feb 05, 2021
In a major structural reform, the Reserve Bank of India (RBI) will soon
allow retail investors to open government securities (G-Sec) or gilt
accounts with the central bank. This decision is expected to help deepen
bond markets in the country. RBI Governor Shaktikanta
Das made this announcement as a part of his Web address after the
Monetary Policy Committee (MPC) meeting recently. The RBI will soon issue guidelines for this process. India will join a
handful of countries, where retail investors have direct access to
government bonds – both primary and secondary – the RBI chief has added.
The platform will be called Retail Direct.
The Central government and the RBI have taken several measures to
encourage retail investment in the G-Sec market. These include
introduction of non-competitive bidding in primary auctions, permitting
stock exchanges to route primary purchases and allowing
a specific retail segment in the secondary market. In continuation of
these efforts, the central bank has proposed to provide retail investors
with online access to both primary and secondary gilt markets directly
through the Retail Direct platform.
“As a 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 along
with the facility to open their gilt securities account (Retail Direct)
with the RBI. Details of the facility will be issued separately,” the
central bank has said in a statement.
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