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finance | IST

Explained: How will RBI's retail direct, integrated ombudsman schemes help investors?

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RBI Retail Direct Scheme and RBI Integrated Ombudsman Scheme are customer-centric initiatives aimed at changing the way the household sector invests and lodges complains about their savings.

Prime Minister Narendra Modi on Friday unveiled two Reserve Bank of India schemes -- RBI Retail Direct Scheme and RBI Integrated Ombudsman Scheme. The customer-centric initiatives aim at changing the way the household sector invests and lodges complains about their savings.
The schemes were launched by the PM through a video-conference attended by Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das.
What is the RBI Retail Direct Scheme?
The RBI Retail Direct Scheme will help retail investors buy and sell government securities (G-secs) online in the primary and secondary markets.
“With the RBI Retail Direct Scheme, small investors in the country have got a safe medium of investment in government securities," PM Modi said.
The G-sec is one of the safest asset classes that a retail investor can bet on.
Small investors can buy and sell G-Secs by opening a gilt securities account online with the central bank called the Retail Direct Gilt (RDG) Account. As per a July notification by the RBI, a retail investor with a savings bank account, PAN, Aadhaar, email id and registered mobile number can open the RDG account. After opening the account, investors can bid for G-secs in primary auctions and buy and sell securities in the secondary market.
As per the RBI, no fee will be charged for any services. Payments will be accepted through internet-banking and UPI. The portal will also provide account statement, details of transactions and balance position of securities holdings. Support facilities will be available to the investors through the registered mobile and email.
The RBI had first floated the idea in its monetary policy in February 2021 and described it as a “major structural reform”.
With the initiative, India becomes the third country after US and Brazil to offer direct exposure to the government bond market to retail participants.
What is the RBI Integrated Ombudsman Scheme?
The Integrated Ombudsman Scheme aims at improving grievance redress mechanism of customer complaints against banks.
Although not a new initiative, the scheme cuts down on complexities that were present earlier. While the banking ombudsman scheme was launched in 1995, redressal system for non-banking financial companies (NBFCs) and digital payments were started in 2018 and 2019, respectively.
Under the initiative, the RBI will merge three ombudsman schemes -- for banks, NBFCs and digital transactions -- into one. At present, the RBI runs these ombudsman schemes from 22 offices.
According to the RBI, there has been a sharp rise in number of complaints against regulated entities from 1.64 lakh in 2017-18 to 3.30 lakh in 2019-20.
The Integrated Ombudsman Scheme, which is based on 'One Nation-One Ombudsman’, will enable customers to lodge complaints, track status and give feedback on one portal.
A multi-lingual toll-free number will also be available for customers to get relevant information on grievance redress.