Prime Minister Narendra Modi on 12 November launched the Retail Direct Scheme of the Reserve Bank of India (RBI) through video conferencing.
RDG Account: Prime Minister Narendra Modi (PM Narendra Modi) launched the Retail Direct Scheme of Reserve Bank of India (RBI) through video conferencing on 12 November. The purpose of bringing this scheme is to increase retail participation in Government Securities. It will become easier for retail investors to buy government securities (G-Sec). Under the scheme, retail investors will be able to get online access to both primary and secondary government securities market.
How to open RDG account
Retail investors can easily open an account by logging on to the website https://rbiretaildirect.in/#/login/. RDG account will be opened by linking OTP and savings account on the registered number.
How much fee on RDG account
RBI will not charge any fees or charges for opening and maintaining Retail Direct Gilt Account under RDG. No charge or fee will be levied for bidding in the primary auction. At the same time, the fee for the payment gateway will be borne by the registered investor.
Who can open account
The eligibility has been fixed for retail investors to open an RDG account. Such retail investors should have a savings account in India. It is necessary to have a Permanent Account Number (PAN) issued by the Income Tax Department, any official document related to KYC, valid email ID and registered mobile number. RDG account can be opened as a single or joint account holder.
Nomination facility
There will be facility of two nominees under RDG account. On the death of the account holder, the security score in the RDG account can be transferred to any other RDG account. The retail investor can also gift the security present in the RDG account to any other retail investor with the security present in the RDG account. NRI retail investors can invest in government securities only under FEMA norms.
Investment process
Auction of government securities in the primary market is the normal process. Only one bid per security is allowed. Payment can be made through UPI and linked bank account. Refund will also be done in the linked bank account itself. The allotted security will be credited to the investor’s RDG account on the day of settlement. Registered investors can easily buy or sell government securities on the online portal for secondary market transactions.
What is this new scheme of RBI?
RBI’s Retail Direct Scheme was announced by Governor Shaktikanta Das on 5 February 2021. Shaktikanta Das called it an important structural reform. The scheme will make it easier for retail investors to access the government securities market. At the same time, retail investors can now open their Government Securities Account (Retail Direct Gilt Account-RDG) with RBI for free.
What are government securities?
Government securities or government securities are issued by the government. These are also called G-Secs. According to RBI, government securities are issued by the central government or state governments and trading is done in it. These are issued to raise funds. These are issued in the form of Treasury bills and debt securities. Treasury bills are issued for 91 days, 182 days and 364 days. At the same time, debt securities are issued for 5 to 40 years.
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