RBI Retail Direct Scheme

The Retail Direct Scheme is an initiative of the Reserve Bank of India. It was launched in India, so that individual investors could invest in government securities directly without requiring intermediaries. 

In this blog post, we shall discuss what is RBI Retail Direct Scheme, its objectives and eligibility criteria. If you are an investor and want to invest in government securities, then we recommend you to read this post!

RBI Retail Direct Scheme: Explained

The RBI Retail Direct Scheme is a scheme launched by the Reserve Bank of India in 2021, to allow the retail/individual investors to set up retail direct gilt (RDG) account with the central bank directly. This account can be opened online. Using this account, the individuals can directly access the government securities market (G-Secs) and purchase and sell G-Secs like dated securities, sovereign gold bonds, state development loans and treasury bills, via online portal https://rbiretaildirect.org.in.

The RDG account does away with the need of intermediaries like brokers and mutual funds. It provides a direct, safe investment in sovereign debt and ensures guaranteed returns and financial inclusion. This account must be linked to a rupee savings bank account maintained in India for fund transfers and savings purpose. The RDG account opening charges are NIL. Additionally, there are no maintenance charges as well. 

Through this account, individuals can participate in primary issuances of government securities as well as trade in the secondary market using a screen-based system. It is important to note that an individual is permitted to maintain only one RDG account. However, a joint RDG account may be opened with another eligible person. 

In such cases, KYC details of both account holders are a mandatory requirement. The second holder of a joint account may also open a separate individual RDG account as long as they stick to the one-account-per-individual rule.

Objectives of RBI Retail Direct Scheme

The central bank’s retail direct scheme’s aim is to provide the below-mentioned facilities in G-Secs via the Retail Direct Portal RBI :-

• To facilitate opening and maintenance of RBI RDG accounts for individual investors.

• Providing access to allotment of government securities, like sovereign gold bonds and t-bills, at primary stage.

• Access to the RBI’s electronic order-matching system (NDS-OM) for trading G-Secs in the secondary market.

Retail Direct Scheme Eligibility Criteria

Investors can register for the Retail Direct Scheme by RBI if they fulfill the following conditions :-

• They must be individual investors.

• They must have a rupee savings bank account maintained in India.

• For KYC purposes, they must possess any officially valid document.

• They must possess a Permanent Account Number (PAN) issued by the Income Tax Department.

• A Valid Email ID.

• A Registered Mobile Number.

• Non-Resident retail investors can invest in Government Securities under Foreign Exchange Management Act, 1999.

Investors who qualify the above mentioned eligibility criteria for the scheme can open RDG accounts alone or jointly with another investor.

How to Invest RBI Retail Direct Scheme?

To invest under this RBI scheme, you need to open an RDG account. Now, you must be wondering how to open RDG account. Well, here are the steps you need to fulfill to open this account. :-

Step 1 :- To begin the account opening process, you need to visit RBI retail direct portal.

Step 2 :- Once you are on the portal, register on it. For registration, you need to furnish details like full name, PAN, mobile number, e-mail address, residential address, savings bank account number, etc., and specify a login name. 

Step 3 :- Then, you need to authenticate mobile number and email address via OTP. All further customer requests and services will be OTP based as well.

Step 4 :- In case of joint account, PAN, e-mail address and phone number of both holders is necessary.

Step 5 :- Upon entering all the details, you will get a reference no. for tracking your application.

Step 6 :- Now, you can initiate KYC verification process. In case of joint accounts, KYC verification of both holders will be done.

Step 7 :- The investor must fill in nomination details during the time of account opening.

Step 8 :- To link the savings bank account to the RDG account, a token amount must be credited in the bank account and verified. 

Step 9 :- Upon successful KYC verification, the RDG account will be opened in the investor’s name. On their email ID, the details pertaining to account number, login id & password to access the Online Portal will be shared.

Step 10 :- In case KYC verification fails, the individual must make a new application or resubmit the existing application after making necessary changes.

Conclusion

Retail Direct Scheme is a scheme launched and operated by the Reserve Bank of India. It was introduced in 2021 and since then, has allowed numerous individual retail investors to directly invest in Government Securities (G-Secs) like T-Bills, dated securities and Sovereign Gold Bonds by opening a free "Retail Direct Gilt (RDG)" account with the RBI online.

Frequently Asked Questions (FAQs)

Q1. When was Retail Direct Scheme launched by RBI?

A. It was launched by the RBI on 21 November 2021.

Q2. Are institutional investors eligible for Retail Direct Scheme?

A. No, institutional investors are ineligible for this scheme. This scheme is only for the individual/retail investors.

Author: Manish Kumar

I’m Manish Kumar, a content management specialist. I simplify complex financial and regulatory topics into clear, insightful content. As a regular contributor to the Registrationwala portal, I provide updates on finance, Tax, government schemes, compliance, and other incorporation information. My goal is to keep you informed about key industry developments and their impact.