RBI Retail Direct Gilt is a neo initiative to connect with the retail customers by providing a one stop solution for enabling investments in Gilt i.e. Government securities. Gilt securities account – RDG(Retail direct gilt) with Reserve Bank of India can be opened by individual retail investors. The eligibility conditions for this account are as followed –
- Retail investors, as defined under the RBI Retail Direct scheme, can register under the Scheme and maintain a RDG Account, if they have the following:
- Rupee savings bank account maintained in India;
- Permanent Account Number (PAN) issued by the Income Tax Department;
- Any OVD for KYC purpose;
- Valid email id; and
- Registered mobile number.
- Non-Resident retail investors eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 are eligible under the scheme.
The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria. Non – competitive bids in primary issuance of all central government securities and state government securities can be placed by the investors. Access to secondary markets is also given through “NDS OM” – RBI’s trading system. NDS OM (Negotiated dealing system -Order matching system) is order driven electronic system that is anonymous screen-based order matching system for secondary market dealing in government securities. Participants get the advantage of this level playing field created. Direct access to the NDS-OM system is currently available only to select financial institutions like Commercial Banks, Primary Dealers, well managed and financially sound UCBs and NBFCs, etc. Other participants can access this system through their Primary members i.e. with whom they maintain Gilt Accounts.
Interest or maturity proceeds shall be received automatically into the linked bank account on the relevant due dates. Following facilities are available on RBI Retail direct portal –
- On-boarding of Retail Direct Investors,
- Opening and management of RDG Accounts,
- Facilitate participation in Non Competitive Bidding in Primary G-sec Auctions through the Clearing Corporation of India (CCIL)
- Facilitate Investing in Sovereign Gold Bonds (SGBs) through CCIL
- Facilitate NDS OM access to Retail Direct Investors for secondary market trading and settlement of such trades through CCIL.
- Provide Investor Services such as:
- Account Statement
- Nomination Facility
- Pledge/Lien
- Gift Transactions
- Facilitate Corporate Actions like Coupon Payments
Following procedure is followed for opening a Retail Direct Gilt Account:
- Registration online on the retail direct portal by eligible investors.
- Consent to have RDG accounts either singly or jointly.
- Important details like Name, Email address, PAN, etc. for opening the account. Also, One Time Password authentication shall be done using mobile number and email address as services shall be OTP based.
- A tracking number to be provided to keep a tap on the status of application.
- KYC guidelines to be implemented. Adherence by CCIL to the RBI KYC Direction 2018 guidelines while registering the investor on the portal.
- KYC verification needed for joint account holders. Individual needs to make fresh application or re submit application in case of KYC non disclosure.
- Validation of the bank account of the investor needs to be done.
- Retail Direct Gilt account is opened of the investor once the KYC is successfully adhered with.
- For the investor to participate in primary auctions and avail other services, essential information related to account number, login id , password is needed to gain access to the online portal.
- Investor is mandatorily required to give the nomination details while opening the account. It shall be displayed online and investor has to give authorization to this detail by uploading the scanned image of signature.
- For participating in primary market and secondary market transactions, RDG account shall be provided on NDS-OM.
Open and maintenance charges of “Retail direct gilt account” is zero. Also, zero fees will be charged by the aggregator for submitting bids in the primary auctions. Charges for payment gateways is applicable and to be paid by the investor. RBI has authorized CCIL to act responsibly as an aggregator for Primary Issuances and as Receiving Office for Sovereign Gold Bondsfor the Retail Direct Investors. For operating the NDS OM platform, CCIL has got the authorization from RBI.
Our institute JIMS Kalkaji lauds this investment option made available by the RBI for retail investors and would appreciate the faculty as well as students PGDM and PGDM(IB) faculty to explore this investment opportunity and connect with the central bank i.e., RBI.
JIMS, Kalkaji
For more information visit: https://www.jagannath.org/
