All you need to know about RBI’s Retail Direct Scheme

To boost the retail participation in government securities, Prime Minister Narendra Modi in a virtual meet on 12th November launched the ‘RBI Retail Direct scheme’. The ‘RBI Retail Direct’ scheme is a one-stop solution to facilitate investment in Government Securities by retail investors. Individuals can now directly purchase Government of India treasury bills, Government of India dated securities, sovereign gold bonds (SGB), and state development loans (SDLs) from primary as well as secondary markets, due to the ‘RBI Retail Direct Scheme’. 

RBI's Retail Direct Scheme

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Individual investors can open a Gilt Securities Account (Retail Direct Gilt (RDG) account) with RBI to purchase and sell government securities through an online portal An individual can open only one RDG account. The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria. The second holder in a joint account can also open an individual RDG account.

Eligibility criteria for opening the RDG account:

Any retail investor can apply for the account and even non-Resident retail investors are eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 but they should have the following;

  • Rupee savings bank account maintained in India.
  • Permanent Account Number (PAN) issued by the Income Tax Department.
  • Any OVD (officially valid Document) for KYC purposes.
  • Valid email id.
  • Registered mobile number.

Minimum investment amounts:

The procedure of opening the account

  • Once an individual investor is eligible, He/She can register on the online portal using the above link and fill up the online form, use the OTP received on the registered mobile number and email id to authenticate and submit the form.
  • Next will be the Know Your Customer (KYC) verification process, there is an option for both online and offline KYC processes, if you have already completed the KYC process previously then the documents will be automatically imported. (Scanned copy of signature will be required)

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  • After the KYC process, NSDL Aadhar verification will be the next and the last step.
  • Upon successful verification, ‘Retail Direct Gilt Account’ will be opened and details for accessing the online portal will be conveyed through SMS/e-mail.
  • In case of KYC failures, the individuals can make a new application or resubmit the application after making the required changes.

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Fee and charges:

  • No Account opening and maintenance charge.
  • No charges for bidding in the primary auctions.
  • The payment gateway charges will be borne by the registered investor.

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Conclusion: The RBI’s Retail direct scheme is a significant milestone that would bring Government securities within easy reach of the common man by simplifying the process of investment but there are a few disadvantages from retail investors point of view, one of them is the interest rate risk meaning if the interest rates are rising then price of bonds decreases hence it would only be advantageous to investors who would only want to hold the bond to maturity but if they would want to hold bonds to maturity, it would be more tax-efficient to buy debt mutual funds which would do the same. 


This article should not be construed as investment advice, please consult your Investment Adviser before making any sound investment decision. If you do not have one visit now.

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