The Reserve Bank of India launched the Retail Direct Scheme in 2020 to empower ordinary investors by providing simple access to various investment choices, such as Government Securities (G-Secs) and Sovereign Gold Bonds (SGBs). This program makes it easier to handle investments in G-Secs while also boosting financial access and market participation.
Government securities (G-Secs) are financial instruments used by the government to raise funding for public projects. These securities come in a variety of formats, including government promissory notes and bearer bonds, and provide investors with a secure investment option.
Purpose of Retail Direct Scheme
Historically, institutional investors controlled the G-Sec market, leaving few options for ordinary investors. The Retail Direct Scheme seeks to reverse this narrative by increasing retail involvement, diversifying the investor base, improving market liquidity, and ensuring stable government bond demand.
Investors that use the RBI Retail Direct portal have access to a variety of government assets, including Government of India Treasury Bills, Dated assets, State Development Loans, and Sovereign Gold Bonds.
Benefits of the RBI Retail Direct Scheme
The Retail Direct Scheme provides investors with several benefits, including the ability to place non-competitive bids in primary issuances, access to the secondary market for purchasing and selling securities, and automatic receipt of interest payments and maturity proceeds directly into linked bank accounts.
Eligibility Criteria for the Retail Direct Scheme
To participate in the Retail Direct Scheme, investors must have a rupee savings bank account in India, a Permanent Account Number (PAN), proper Know Your Customer (KYC) documentation, and, for non-resident investors, following Foreign Exchange Management Act (FEMA) requirements.
Documents Required for Opening a Retail Direct Scheme Account
- PAN Card
- Mobile number
- Email address
- Scanned signature
- Bank account details
- Aadhaar Number linked with a registered mobile number, and address proof.
Step-by-Step Guide to Opening a Retail Direct Scheme Account:
- Go to https://rbiretaildirect.org.in and start the account opening process.
- Provide personal information such as your PAN, cellphone number, email address, residence address, and savings bank account number.
- Use OTP to verify mobile numbers and email addresses for further requests and services.
- Receive a reference number for tracking application status.
- Perform KYC verification, including joint account holders if appropriate.
- Provide nomination information throughout the account opening procedure.
- Verify a token transaction to link the savings bank account with the Retail Direct account.
- After successful KYC verification, an RDG account will be created.
- To use the Online Portal, receive account credentials via a registered email address.
