Retail Direct Scheme of RBI

Why in news?

• The RBI recently released the features of Retail Direct Gilt Account as part of its   initiative to encourage retail participation in government bonds.

About the scheme:

• The scheme of Reserve Bank of India (RBI) Retail Direct has been formulated as a one-stop solution to facilitate investment in government securities by individual investors
• Under the scheme, retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with the RBI.
• Retail Investor is a non-professional investor who buys and sells securities or funds that contain a basket of securities such as mutual funds and Exchange Traded Funds (ETFs).
• A Gilt Account can be compared with a bank account, except that the account is debited or credited with treasury bills or government securities instead of money.

How it works?

• A dedicated online portal will provide registered users access to primary issuance of government securities and to Negotiated Dealing System-Order Matching system (NDS-OM). 
• NDS-OM refers to RBI’s screen-based electronic order matching system for trading in government securities in the secondary market.

PRELIMS QUESTION:

Retail Direct Scheme, which aims to facilitate investment in government securities by individual investors, is launched by?

(a) Financial Stability and Development Council

(b) Reserve Bank of India

(c) SEBI

(d) NITI Aayog

Answer