The Reserve Bank of India (RBI) is set to introduce a mobile application to facilitate retail investors’ seamless investment in government securities. This initiative aims to enhance individual participation in government bonds and deepen the G-sec market.
Background: RBI Retail Direct Scheme
- The app is an extension of RBI’s Retail Direct scheme, introduced in November 2021.
- RBI Retail Direct Scheme allows individual investors to maintain gilt accounts with the RBI and invest in government securities.
Announcement and Features of the Mobile App
- RBI Governor Shaktikanta Das announced the launch of the app during the first monetary policy review of fiscal year 2025.
- The app will enable investors to buy central and state government bonds as well as Treasury bills conveniently.
- It will also allow investors to participate in primary auctions and trade securities through the NDS-OM platform.
- The app aims to provide greater convenience to retail investors and deepen the G-sec market.
NDS-OM Platform
- NDS-OM refers to RBI’s screen-based, anonymous electronic order matching system for trading in Government securities in the secondary market.
- The platform facilitates seamless trading of government securities.
Payment and Support Facilities
- Payments for transactions can be conveniently made using saving bank accounts through internet banking or Unified Payments Interface (UPI).
- Investors can access help and support facilities through the app, toll-free telephone number, and email.
- Services include transaction and balance statements, nomination facility, pledge or lien of securities, and gift transactions.
- No fees will be charged for facilities provided under the scheme.
Objectives of RBI Retail Direct Scheme
- The scheme aims to provide a safe, simple, direct, and secured platform to investors.
- It offers comprehensive facilities to retail investors in the government securities market through an online portal.
Eligibility Criteria for Retail Investors
- Retail investors can register under the scheme and maintain an RDG account if they meet specific requirements:
- Rupee savings bank account maintained in India.
- PAN (Permanent Account Number).
- Any officially valid document for KYC (Know Your Customer) purposes.
- Valid email ID and registered mobile number.
Multiple Choice Questions (MCQs) with Answers:
- What is the primary objective of RBI’s introduction of the mobile application for government securities?
a) To restrict retail investor participation
b) To enhance individual participation in government bonds
c) To reduce accessibility to government securities
d) To limit trading options for retail investors
Answer: b) To enhance individual participation in government bonds - What does NDS-OM stand for in the context of RBI’s initiatives?
a) National Direct Securities-Offering Mechanism
b) National Demand-Supply Operation Model
c) Non-Digital Securities-Ordering Method
d) None of the above
Answer: d) None of the above (Correct answer: RBI’s screen-based, anonymous electronic order matching system for trading in Government securities in the secondary market.) - How can investors make payments for transactions using the mobile app?
a) Only through credit cards
b) Only through cash deposits
c) Using saving bank accounts through internet banking or Unified Payments Interface (UPI)
d) None of the above
Answer: c) Using saving bank accounts through internet banking or Unified Payments Interface (UPI) - What services are provided under the RBI Retail Direct Scheme?
a) Only transaction statements
b) Only balance statements
c) Transaction and balance statements, nomination facility, pledge or lien of securities, and gift transactions
d) None of the above
Answer: c) Transaction and balance statements, nomination facility, pledge or lien of securities, and gift transactions - What are the eligibility criteria for retail investors to register under the RBI Retail Direct Scheme?
a) Holding a foreign bank account
b) PAN and Aadhar are optional
c) Rupee savings bank account maintained in India, PAN, KYC document, email ID, and registered mobile number
d) None of the above
Answer: c) Rupee savings bank account maintained in India, PAN, KYC document, email ID, and registered mobile number