MUMBAI: The RBI has allowed retail investors to open accounts with the central bank through which they can purchase government bonds in auctions and maintain them in dematerialised (demat) form.
This was first announced by RBI governor Shaktikanta Das in February this year. He had pointed out that only a handful of other countries like the US and Brazil had this facility.
Under the scheme announced by the RBI on Monday, investors can open a ‘Retail Direct Gilt Account’ through an online portal. This portal will give investors access to the primary auction of government securities. While the guidelines are in place, the RBI has not yet announced the launch date.
It will also provide them access to the secondary market — the NDS-OM (negotiated dealing system – order matching) segment. Until now, only entities like banks and MFs could participate in this segment.
Most of the time, government bonds provide lesser returns than fixed deposits. However, if the bond is held to maturity, the investor is assured of getting his money back.