RBI Notifications

RBI to launch Mobile App for Retail Direct scheme


From UPSC perspective, the following things are important :

Prelims level: Retail Direct Scheme

Mains level: NA

Why in the news?

The RBI has decided to introduce a Mobile App of its RBI Retail Direct scheme aimed at facilitating seamless investment in government securities by retail investors.

What is Retail Direct Scheme?

  • Retail Direct Scheme was rolled out in November 2021, giving access to individual investors to maintain gilt accounts with RBI and invest in government securities.
  • Using this app, investors can buy central and state government bonds as well as Treasury bills.
  • It enables investors to buy securities in primary auctions as well as buy/sell securities through the Negotiated Dealing System-Order Matching system (NDS-OM) platform.
  • A Gilt Account can be compared with a bank account, except that the account is debited or credited with treasury bills or government securities instead of money.

Treasury Bills:

  • They are promissory notes issued by the RBI on behalf of the government as a short term liability and sold to banks and to the public.
  • The maturity period ranges from 14 to 364 days.
  • They are the negotiable instruments, i.e. they are freely transferable.
  • No interest is paid on such bills but they are issued at a discount on their face value.

 How does it work?

  • Under the scheme, small investors can buy or sell government securities (G-Secs), or bonds, directly without an intermediary like a mutual fund.
  • However, the same tax rules apply to income from G-Secs.
  • The minimum amount for a bid is ₹10,000 and in multiples of ₹10,000 thereafter.
  • Payments may be made through Net banking or the UPI

Benefits of RDS

  • With the government being the borrower, there is a sovereign guarantee for the funds and hence zero risk of default.
  • Also, government securities may offer better interest rates than bank fixed deposits, depending on prevailing interest rate trends.

How can individuals access G-Sec offerings?

  • Investors wishing to open a Retail Direct Gilt account directly with the RBI can do so through an online portal set up for the purpose of the scheme.
  • Once the account is activated with the aid of a password sent to the user’s mobile phone, investors will be permitted to buy securities either in the primary market or in the secondary market.


[2018] Consider the following statements:

1. The Reserve Bank of India manages and services Government of India Securities but not any State Government Securities.

2. Treasury bills are issued by the Government of India and there are no treasury bills issued by the State Governments.

3. Treasury bills offer are issued at a discount from the par value.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 only

(c) 2 and 3 only

(d) 1, 2 and 3

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