The RBI plans to provide retail investors online access to the government securities (G-Sec) market — both primary and secondary — directly through the Reserve Bank (‘Retail Direct’).
This move comes in the backdrop of the government’s huge borrowing programme of ₹12-lakh crore in FY22.
The central bank said this will broaden the investor base and provide retail investors with enhanced access to the G-Sec market. Per the plan, retail investors will be allowed to open Gilt Accounts with the RBI.
To encourage retail investment in G-Sec, the Government and the RBI have so far taken measures such as 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.
RBI Governor Shaktikanta Das said: “This is a major structural reform and world over very few countries have done that (allowed direct retail participation in G-Sec). I think very few countries like the US and Brazil have done that. In Asia, we are the first to do it to the best of my information.”
Rajkiran Rai G, Chairman, Indian Banks’ Association, said: “Reforms in the retail participation in government securities market is a path breaking reform and would expand the investor base. However, retail customers need to be educated on the nuances of the G-Sec market. For this more awareness is to be created.”