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RBI announces RDG account for hassle-free trading in govt bonds for retail investors

Mumbai:13/7/21:The Reserve Bank of India (RBI) on Monday, July 12, 2021, said retail investors can open an account with the central bank to start trading in government bonds. The online portal for retail investors will provide access to the bond trading platform available to institutional investors as well, and retail investors can also bid for bonds in primary auctions like larger institutions.

The starting date for the Retail Direct Gilt (RDG) account is yet to be announced by the RBI, but other modalities have been spelt out.

Who can open the account?

Both resident Indian retail investors and non-resident retail investors will be eligible to invest in Government securities. But as per the rules laid down by the Foreign Exchange Management Act. RBI said that the RDG account can be opened singly or jointly with any other retail investor who fulfills the eligibility criteria.

The same account will be valid for bidding in primary auctions as well as secondary market trading in Negotiated Dealing System – Order Matching (NDS-OM).

Documents required for account opening

Retail investors can register under the scheme and maintain an RDG account with basic KYC, such as a Rupee Savings Bank Account in India, Permanent Account Number (PAN) issued by the Income Tax Department, any official KYC Valid documents, valid email, and registered mobile number.

How to register on Online Portal?

Investors can register on the online portal by filling up the online form and using the one-time password (OTP) received on the registered mobile number and email-ID to authenticate and submit the form. On successful registration, ‘Retail Direct Gilt Account’ will be opened and details will be given through e-mail or SMS to access the online portal.

Things to remember before placing the order

  • Only one bid per security will be allowed in the primary auctions. Payment can be made through UPI or net banking. On submission of the bid, the fund will be blocked and debited on the basis of allotment. This will be done by payment aggregators or banks.
  • For secondary market deals, before the commencement of trading hours or during the day, the investor should transfer funds from the linked bank account to the designated account of CCIL (Clearing Corporation of NDS-OM) using net-banking/UPI. Based on the actual transfer message, a funding limit (buy limit) will be given for placing ‘Buy’ orders. RBI said that at the end of the trading session, any excess funds lying in the credit of the investor will be refunded.
  • The securities purchased will be credited to the Retail Direct Gilt account on the day of settlement. The securities identified for sale will be blocked at the time of placing the order until the settlement of the trade, and funds from the sale transaction will be credited to the linked bank account on the day of settlement.

About Editor in chief

Ashok Palit has completed his graduation from Upendranath College Soro, Balasore and post graduation from Utkal University in Odia Language and literture.. He has also carved out a niche for himself as a scribe of eminence after joining the profession in 1988. He is also an independent media production professional. He brings loads of experience to Advanced Media, Ashok Palit as a cineaste has been active in film criticism for over three decades. As a film society activist, he soared to eminence for his profound commitment to the art film appreciation and aesthetics of cinema. His mode of discourse is often erudite but always lucid and comprehensible marked by a perfect acumen so rare in the field. A film aesthete with an immense fond of critical sensibilities, he wrote about growth and development of odia cinema in New Indian Express, The Times of India, The Hindustan Times, The Asian Age and Screen. He has been working as an Editor for Cine Samaya from 2002-2004.. He had made solid contribution on cinema in many odia Dailies and weekly such as Samaj, Prajatantra, Dharatri, Samaya, Satabadi, and weekly Samaya.

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