PM launches schemes for financial inclusion

Prime Minister Narendra Modi launched two initiatives of the Reserve Bank of India (RBI) on Friday, allowing retail investors to directly buy government bonds for the first time and making it easier for consumers to lodge complaints related to banking and digital payments.

The Retail Direct Scheme will allow individuals to open their government securities account with the RBI, a move aimed at widening the investor base for sovereign bonds as the central bank seeks to fund the government’s massive borrowing programme. RBI governor Shaktikanta Das had announced the initiative in February.

The securities on offer are bonds sold by the central government, state development loans, or bonds issued by state governments, and sovereign gold bonds, whose price is linked to gold.

Individual investors can buy the bonds by opening Retail Direct Gilt accounts with the RBI.

“With the RBI Retail Direct Scheme, small investors in the country have a safe way to invest in government securities,” Modi said at the virtual launch.

Investors can buy government bonds in primary auctions, through which the central and state governments sell their securities in the debt market.

RBI has allowed retail investors to go for ‘non-competitive bidding’, which means they can submit bids without specifying a price. The bonds get allotted to the investors at a price established by competitive bidding among financial institutions.

The prime minister also launched the RBI’s integrated ombudsman scheme to make it easier for customers to seek redressal of grievances relating to banking and digital payments.

Customers can now report their complaints related to banks, non-banking financial companies and digital payments companies in one place.

After the complaint is lodged, customers can track its status, submit related documents and receive feedback from the ombudsman.

They can also use a multilingual toll-free number to get relevant information on grievance redressal and filing of complaints.

An ombudsman is a public authority that consumers can approach if they are not satisfied with the grievance redressal mechanism of a financial institution.

Until now, there were three different ombudsman schemes for the three categories of financial intermediaries. The link to the grievance redressal portal will be available on RBI’s website.

The integrated ombudsman scheme covers banks, non-bank lenders and other entities that the RBI regulates.

“One nation, one ombudsman is a progressive step in bringing together the currently differently held redressal framework into an integrated one,” said Srinath Sridharan, governance council member at Fintech Association Consumer Empowerment.

“It will enhance the speed and efficiency of consumer grievances being redressed by the regulated entities,” he said.

Highlighting that banking sector reforms ranging from inclusion in the financial sector to technological integration have been carried out in the past few years, the PM said, “We have seen their strength in this difficult time of covid. The decisions of the RBI also helped in increasing the impact of the big decisions that the government has taken in recent times.”