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RBI Retail Direct Scheme for retail investors: All FAQs answered

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RBI Retail Direct Scheme is aimed at enhancing access to the government securities market for retail investors. Here are all FAQs answered for the new scheme for retail investors

RBI Retail Direct Scheme for retail investors: All FAQs answered
With the launch of the RBI Retail Direct Scheme, individuals can now directly purchase treasury bills, dated securities, sovereign gold bonds (SGB), and state development loans (SDLs) from primary as well as secondary markets.
The government said the scheme is aimed at enhancing access to the government securities market for retail investors. It offers them a new avenue for directly investing in the securities issued by the Centre and state governments.
Here are all FAQs answered about RBI Retail Direct Scheme
What is RBI Retail Direct Scheme?
Retail Direct Scheme is a one-stop solution to facilitate investment in government securities by individual investors directly in the primary market (auctions) and secondary market. Under this scheme, individual retail investors can open a Gilt Securities Account – “Retail Direct Gilt (RDG)” – account with RBI and buy and sell government securities through online portal https://rbiretaildirect.org.in
What kinds of government securities I can invest in through Retail Direct platform?
Government of India Treasury Bills (T-Bills), Government of India dated securities (dated G-Sec), State Development Loans (SDLs), Sovereign Gold Bonds (SGB).
Who can open a Retail Direct Gilt (RDG) account?
Any retail investor (i.e any individual) is allowed to open an RDG account. The person must have (i) Rupee savings bank account maintained in India, (ii) Permanent Account Number (PAN) issued by the Income Tax Department, (iii) any officially valid Document (OVD) for Know Your Customer (KYC) purpose, (iv) valid email id and (v) registered mobile number.
Non-Resident retail investors are eligible to invest in Government Securities under Foreign Exchange Management Act, 1999.
How many RDG accounts can one open?
An individual can open only one RDG account. The account can be opened singly or jointly with another retail investor. The second holder in a joint account may also open an individual RDG account.
How to open an RDG account?
a. Eligible Investors may log in to https://rbiretaildirect.org.in and register using the Registration link.
b. To open an account, the investor will have to furnish details like full name, PAN, mobile number, e-mail address, residential address, savings bank account number, etc. and specify a login name. Mobile number and email address will be authenticated using OTP and all further customer requests and services will be OTP-based.
c. Once these details have been provided, the person will get a reference number to track application.
d. Initiate Know Your Customer (KYC) verification process next.
e. It will be mandatory for the investor to fill in nomination details at the time of opening the account.
f. The savings bank account of the customer will be linked to Retail Direct account by crediting a token amount into the bank account and verifying the same.
g. Once the KYC is successful, an RDG account will be opened in the name of the investor(s).
h. Information related to account number, login id & password to access the Online Portal will be made available to the customer on the registered e-mail id.
i. In case of KYC failures, the individual can make a new application or resubmit the application after making the necessary changes.
Can one open an RDG account if the person has already invested in government securities through other channels?
Yes
What is the cost of opening and maintaining an RDG account?
RDG account can be opened and maintained with RBI free of cost.
How to link bank account with Retail Direct Gilt (RDG) account?
To link one’s bank account, the person can either upload a picture of the bank account’s cancelled cheque from where the system will automatically read the required details or enter the bank account details himself. The system will then transfer a token amount to the account. Confirming this token amount on the next screen will lead to automatic verification and linking.
How many nominees can be entered?
Up to 2 nominees. Investors, if they so desire, can change the nominee details through the Retail Direct portal later.
What is the periodicity of primary market auctions?
While the primary auctions are conducted generally on specified days of the week, the days may differ due to holidays or other considerations. Half-yearly indicative calendars are published on RBI website for Government of India’s dated securities and Sovereign Gold Bonds whereas quarterly indicative calendars are published for Treasury Bills and State Development loans.
What are the risks of investing in Government Securities?
G-Secs are credit risk free instruments in domestic currency. However, there are market risks if you sell before maturity. You may refer to ‘Government Securities Market- A primer’, published on RBI website, to understand various risks associated with government securities.
What are the returns on investments in Government securities?
The returns on Government securities are dependent on various features of the securities. You may refer to ‘Government Securities Market- A primer’, published on RBI website, to understand the factors affecting the returns on government securities.
What is the minimum amount for investment through Retail Direct platform?
S. No.Government securityMinimum investment amount/quantity (as on Nov 12, 2021)
1Government of India Treasury Bills (T-Bills)₹10,000
2Government of India dated securities (dated G-Sec)₹10,000
3State Development Loans (SDLs)₹10,000
4Sovereign Gold Bonds (SGB)One gram of gold
What is the maximum amount that one can invest in government securities?
For dated G-Sec, T-Bills and SDLs – The following limits apply if you purchase these securities through the non-competitive segment of primary auctions:
S. No.Government securityMaximum investment amount/quantity (as on Nov 12, 2021)
1Government of India Treasury Bills (T-Bills)The aggregate allocation of all non-competitive bids will be restricted to a maximum of 5% of the aggregate nominal amount of the issue within the notified amount as specified by the Government of India, or any other percentage determined by RBI.
2Government of India dated securities (dated G-Sec)₹2 crore (face value) per security per auction.
3State Development Loans (SDLs)1% of notified amount (face value) per auction
For Sovereign Gold Bonds (SGBs) – An individual may not subscribe to more than 4 kg of SGBs per fiscal year. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.
How to buy securities through Retail Direct platform?
There are two ways to buy Government securities through Retail Direct platform:
i. By placing a bid in the primary auctions of dated G-Sec, T-Bills and SDLs (Non-competitive segment only, i.e., by only entering the desired amount of securities, without entering a price). For Sovereign Gold Bonds (SGBs), you may place a bid during the subscription windows announced by RBI on its website. For step-by-step details on bidding in auctions, you may refer to the User Manual on the Retail Direct Portal.
ii. By placing a buy quote in the secondary market portal.
How to sell securities through Retail Direct platform?
One can sell securities by placing an offer (sell) order in the secondary market portal. You must have the security in your account before you can sell that security.
What is the process for bidding in primary auctions through the Retail Direct platform?
i. After logging into the Primary Market Retail Direct platform, select the ‘Primary Market’ option beside the Dashboard, at the top of the page.
ii. Select a security to bid from the ‘Auction Watch’ and enter the bid amount in the ‘Bid Entry’ window.
iii. Individuals can fund their bid either at the time of bidding or at a later time, but before the closure of bidding/subscription window. Bids which are not funded as on the date of submission of bids to RBI will be cancelled.
iv. For making payment for the bids, retail clients can use services like UPI (Transfer or Block) and Net Banking to transfer funds to a designated current account using Payment Gateways linked to the Online Portal.
v. Based on the allotment advice received as a part of the auction result, the allotments will be made to the individual investors.
vi. In case of full allotment, each bidder will be allocated the entire Face Value for which bids were submitted. In case of partial allotment, a pro-rata allotment will be made to the bidder based on the partial allocation percentage determined in the auction.
Can one use a different bank account other than the one registered with the Retail Direct portal for funding bids?
No. However, if you want to use a different bank account, you can replace the linked bank account through the Retail Direct portal.
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