This will make India one of the few countries to allow such an access to retail investors for trading in government securities, the RBI Governor said, adding that this is a major structural reform.
The RBI Governor on Friday said that the central bank will provide retail investors with direct access to the Gsec (government bonds etc) market, both primary and secondary markets.
“It is proposed to provide retail investors with online access to government securities market – both primary and secondary directly through the Reserve Ban. We are calling it Retail Direct," RBI Governor Shaktikanta Das said in his address post monetary policy committee (MPC) meeting.
According to the governor, the move will broaden the investor base in G-Sec market, and provide retail investor with enhanced access.
Around two years back, the government had allowed retail participation in G-Sec auctioning. They could buy G-Secs and treasury bills (T-bills ) via National Stock Exchange’s ‘NSE goBID’ and through ‘BSE Direct’ platforms.
Both exchanges allow retail investors to participate in the non-competitive bidding section of G-sec auctions. These auctions take place on Fridays, while those for T-bills are held on Wednesdays. Five per cent of these auctions are reserved for non-competitive bidding that retail investors can participate in.
On BSE and NSE, investors don’t need to open any special accounts to participate in auctions. They can do so through their existing broking accounts. The brokerage fee that can be charged cannot exceed 0.06 per cent, or 6 paise for every ₹100 worth of allotment value. The stock exchanges handle order collection, payment, and refund.