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RBI offers hassle-free trading in govt bonds for retail investors – Business Standard

The Reserve Bank of India (RBI) on Monday said can open an account with the central bank in few easy steps online to start trading in government bonds.

The online portal for will give access to the bond trading platform available for institutional investors as well, and the can also bid for bonds in primary auctions just as large institutions do.

The starting date for the ‘retail direct gilt’ (RDG) account has not been announced by the yet, but other modalities were spelt out.

Retail investors can register under the scheme and maintain a RDG account with basic KYC, such as rupee savings bank account maintained in India, permanent account number (PAN) issued by the Income Tax Department, any officially valid document for KYC, valid email, and registered mobile number.

Non-resident retail investors will also be eligible to invest in government securities, but as per the rules set by Foreign Exchange Management Act. The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria, the said.

Investors can register on the online portal by filling up the online form and use the OTP received on the registered mobile number and email id to authenticate and submit the form. Upon successful registration, ‘Retail Direct Gilt Account’ will be opened and details for accessing the online portal will be conveyed through SMS or e-mail.

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The same account will be valid for secondary market trading at Negotiated Dealing System — Order Matching (NDS-OM), as well as for placing bids in primary auctions.

In primary auctions, only one bid per security will be permitted. Payment can be made through net banking or UPI. Funds will be blocked at the submission of the bid, and will be debited depending upon the allotment. This will be done by the payment aggregators, or banks.

For secondary market deals, before the start of the trading hours or during the day, the investor should transfer funds to the designated account of CCIL (Clearing corporation of NDS-OM) using net-banking/UPI from the linked bank account. Based on actual transfer/success message, a funding limit (Buying Limit) will be given for placing ‘Buy’ orders. At the end of the trading session, any excess funds lying to the credit of the investor will be refunded, said.

UPI can also be used for the purpose.

“Similar facility through banks will be made available in due course,” the RBI said.

Securities bought will be credited to the RDG Account on the day of settlement. Securities identified for sale will be blocked at the time of placing order till the settlement of the trade, and funds from the sale transactions will be credited to the linked bank account on the day of settlement.

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