As part of continuing efforts to increase retail participation in government securities, ‘the RBI Retail Direct’ facility was announced in the Statement of Developmental and Regulatory Policies dated February 05, 2021 for improving ease of access by retail investors through online access to the government securities market – both primary and secondary - along with the facility to open their gilt securities account (‘Retail Direct’) with the RBI.

The central government has provided the public with an opportunity to invest directly in government securities (G-secs) and bonds. The Retail Direct Scheme, launched by Prime Minister Narendra Modi this month, allows retail investors to open ‘Retail Direct Gilt Account’ (RDG) with the Reserve Bank of India (RBI) and invest in G-secs, as reported by The Economic Times.Also Read - Indian Foreign Reserves Fall USD 2.71 Billion

Any individual who is a retail investor can open the RDG account, according to the report. It further states that as NRIS are allowed to invest in G-secs under the Foreign Exchange Management Act, 1999, they too can open an RDG account. Also Read - RBI Internship 2022: Bank Invites Application For Summer Internship, Apply Before December 31; Check Salary, Eligibility and How To Apply

In pursuance of this announcement, the ‘RBI Retail Direct’ scheme, which is a one-stop solution to facilitate investment in Government Securities by individual investors has been issued. The highlights of the ‘RBI Retail Direct’ scheme are:

1. Retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
2. RDG Account can be opened through an ‘Online portal’ provided for the purpose of the scheme.
3. The ‘Online portal’ will also give the registered users the following facilities:
   1. Access to primary issuance of Government securities
   2. Access to NDS-OM.

The scheme of Reserve Bank of India (RBI) Retail Direct has been formulated as a one-stop solution to facilitate investment in Government Securities by individual investors.

I. Definitions

Terms used in this document shall bear the meaning assigned to them as under:

1. a. Aggregator / Receiving Office means Clearing Corporation of India Limited (CCIL) or any other entity as may be approved by RBI under the scheme;
2. b. Government securities, for the purpose of this scheme, mean securities issued in form of stock by credit to SGL/CSGL account maintained with RBI as defined under Section 3(iii) of Government Securities Act 2006. These include:
   i) Government of India Treasury Bills;
   ii) Government of India dated securities;
   iii) Sovereign Gold Bonds (SGB);
   iv) State Development Loans (SDLs)
3. Member/Associate Member of CCIL means entities who have been granted membership of CCIL as per their membership policy;
4. NDS-OM means RBI’s screen based, anonymous electronic order matching system for trading in Government securities in the secondary market;
5. Odd Lot segment means Odd Lot segment of NDS-OM;
6. OTP means one-time-password;
7. OVD means Officially Valid Document defined under RBI-Know Your Customer (KYC) Direction, 2016, as amended from time to time;
8. Online portal means RBI Retail Direct Online portal;
9. Retail Direct Gilt Account (RDG Account) means gilt account maintained in the books of RBI under this Scheme;
10. Retail investors means individuals (natural persons);
11. Request for Quote (RFQ) mode means the on-screen negotiation system of RBI’s NDS-OM system;
12. SMS means short message service.
13. VFT means ‘Value Free Transfer’ of Government securities as permitted by RBI vide notification dated November 16, 2018, as amended from time to time

II. Scope of the Scheme

1. ‘RBI Retail Direct’ is a comprehensive scheme which provides the following facilities to retail investors in government securities market through an online portal:
   1. Open and maintain a ‘Retail Direct Gilt Account’ (RDG Account)
   2. Access to primary issuance of Government securities
   3. Access to NDS-OM

III. Eligibility

1. Retail investors, as defined under the scheme, can register under the Scheme and maintain a RDG Account, if they have the following:
   1. Permanent Account Number (PAN) issued by the Income Tax Department;
   2. Access to primary issuance of Government securities
   3. Any OVD for KYC purpose;
   4. Valid email id; and
   5. Registered mobile number
2. Non-Resident retail investors eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 are eligible under the scheme.
3. The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria.

IV. Procedure

Registration

1. 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.
2. Instructions issued under RBI-Know Your Customer (KYC) Direction, 2016, updated from time to time, will be adhered to during onboarding the investors. Upon successful registration, ‘Retail Direct Gilt Account’ will be opened and details for accessing the online portal will be conveyed through SMS/e-mail.
3. RDG Account shall be available for primary market participation as well as secondary market transactions on NDS-OM.

Primary market participation

4. Participation and allotment of securities will be as per the non-competitive scheme for participation in primary auction of government securities and procedural guidelines for SGB issuance.
5. Only one bid per security is permitted. On submission of the bid, the total amount payable will be displayed.
6. Payment to the aggregator / receiving office can be made through either of the following ways:
   1. Using the net-banking/UPI facility from the linked bank account, whereby funds will be debited at the time of submission of bids on the portal.
   2. Using the UPI facility, whereby funds in the linked bank account can be blocked at the time of submission of bids on the portal which will be debited from this account on successful allotment in the auction. Similar facility through banks will be made available in due course.
   3. Refund, if any, will be credited to the investor’s bank account as per the timelines specified by the aggregator.
7. Allotted securities will be issued to the investors by credit to their RDG Account on the day of settlement.

Secondary market transaction-NDS-OM

8. Registered investors can access the secondary market transaction link on the online portal to buy or sell government securities through NDS-OM (odd lot segment/RFQ).

Buy

9. Payment can be made through either of the following ways:
   1. Before start of 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.
   2. Using the UPI facility, whereby funds in the linked bank account can be blocked at the time of placing order which will be debited from this account on the day of settlement. Similar facility through banks will be made available in due course.
10. Securities purchased will be credited to the RDG Account on the day of settlement.

Sell

11. Securities identified for sale will be blocked at the time of placing order till the settlement of the trade.
12. Funds from the sale transactions will be credited to the linked bank account on the day of settlement.

Non-Trade transactions – Value Free Transactions (VFT)

13. Transactions permitted under VFT guidelines issued by RBI on November 16, 2018, as amended from time to time, as applicable to retail investors, will be available under the scheme.
14. For such purposes, the investors should submit an application on the online portal.

V. Investor services

Registered investors can use the online portal for the following investor services:

1. Account Statement

Transaction history and balance position of securities holdings in the Retail Direct Gilt Account can be obtained from the link provided. All transaction alerts will be provided through e-mail/SMS.

2. Nomination facility

The nomination form in the prescribed format duly signed can be filled up and uploaded. There can be a maximum of two nominees. In the event of death of the registered investor, the securities available in the RDG Account can be transmitted to the RDG Account or any other Government securities account of the nominee on submission of death certificate and transmission form.

3. Pledge/Lien

Securities held in the RDG Account will be available for pledge/lien

4. Gift Transactions

‘Retail Direct Investors’ will have an online facility to gift government securities to other Retail Direct Investors.

5. Grievance redressal

Any query or grievances related to ‘Retail Direct’ Scheme can be raised on the portal which will be handled/resolved by Public Debt Office (PDO) Mumbai, RBI.

Any query or grievances related to ‘Retail Direct’ Scheme can be raised on the portal which will be handled/resolved by Public Debt Office (PDO) Mumbai, RBI.

1. No fee will be charged for opening and maintaining ‘Retail Direct Gilt account’ with RBI.
2. No fee will be charged by the aggregator for submitting bids in the primary auctions.
3. Fee for payment gateway etc., as applicable, will be borne by the registered investor.

Frequently Asked Questions About RBI Retail Direct Account

Question: What is RBI Retail Direct Scheme?
Answer: Retail Direct scheme is a one-stop solution to facilitate investment in Government Securities by Individual Investors. Under this scheme Individual Retail investors can open Gilt Securities Account – “Retail Direct Gilt (RDG)” Account with the RBI.


Question: Who can open Retail Direct Gilt Account?
Answer: Retail investors would mean all individuals (natural persons)

Retail investors, as defined under the RBI Retail Direct scheme, can register under the Scheme and maintain a RDG Account, if they have the following:

• Rupee savings bank account maintained in India;
• Permanent Account Number (PAN) issued by the Income Tax Department;
• Any OVD for KYC purpose;
• Valid email id; and
• Registered mobile number.
• Non-Resident retail investors eligible to invest in Government Securities under Foreign Exchange Management Act, 1999 are eligible under the scheme.
• The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria.

Question: What are the benefits of the Scheme?
Answer: Retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with RBI.

The investor can place non competitive bids in Primary issuance of all Central Government securities (including Treasury Bills and Sovereign Gold bonds) as well as securities issued by various State Governments.

Under this scheme, the individual can also access Secondary market through “NDS OM” - RBI’s trading system.

The investor will automatically receive any interest paid/maturity proceeds into his linked bank account on due dates.


Question: What are the facilities available on the RBI Retail Direct Portal?
Answer: The RBI Retail Direct Online Portal will facilitate the following:

On-boarding of Retail Direct Investors,
Opening and management of RDG Accounts,
Facilitate participation in Non Competitive Bidding in Primary G-sec Auctions through the Clearing Corporation of India (CCIL)
Facilitate Investing in Sovereign Gold Bonds (SGBs) through CCIL
Facilitate NDS OM access to Retail Direct Investors for secondary market trading and settlement of such trades through CCIL.
Provide Investor Services such as:

• Account Statement
• Nomination Facility
• Pledge/Lien
• Gift Transactions
• Facilitate Corporate Actions such as:
• Coupon Payments
• Coupon Payments

Question: What are the documents requiredfor opening a Retail Direct Gilt Account?
Answer: The individual can login to RBI Retail Direct to open a Retail Direct Gilt Account. The account can be opened online with just PAN, Rupee Savings Account, email id and mobile number of the Individual. With these details, the individual needs to complete seamless online KYC procedure to do registration under this scheme. Investors will have to follow the RBI KYC Guidelines while opening the RDG Account.


Question: What is the procedure for opening a Retail Direct Gilt Account?
Answer: Eligible Investors will be allowed to register online on the Retail Direct Portal;

• The eligible retail clients can open RDG Account either singly or jointly;
• To open an account, the investor will have to furnish details like Full Name, PAN, Mobile Number, Email Address, Residential Address, Bank Account number etc. The mobile number and email address will be authenticated using OTP as all further customer request and services will be OTP based;
• The user will be provided with a tracking number to track application status;
• Such Investors will be subject to Know your Customer Guidelines. CCIL will adhere to the RBI KYC Direction 2018 while onboarding the Investor;
• In case of Joint Accounts, the KYC verification is proposed to be done for both the holders. In case of KYC failures, the individual can make new application or resubmit application after making necessary changes;
• The Bank Account of the Customer will also be validated
• Once the KYC is successful, a Retail Direct Gilt (RDG) Account will be opened in the name of the Investor(s);
• Information related to account number, login id & password to access the Online Portal for participating in primary auctions and accessing other services will be made available to the Customer over mail.
• It will be mandatory for the Investor to fill in the nomination details at the time of opening of the account. The nomination details will be displayed online to the Investor and the Investor will have to accept the same by uploading and attaching a scanned image of signature.
• The RDG Account will be available for primary market participation and well as secondary market transactions on NDS OM;

Question: What is permitted under Primary Issuances?
Answer: RDG Account holders have been allowed to participate in the primary issuance of CG/SG/T-bill/SGB. CCIL will act as the Aggregator for receiving bids for Primary Auctions from such Retail Direct (RD) Investors;

CCIL will also act as the Receiving Office for receiving bids for Sovereign Gold Bonds (SGB) from such RD Investors;

Question: How will the bidding happen using the RBI Retail Direct Portal?
Answer: The participation of RDG Account holder, in CG/SG/T-bill Primary Auctions will be on non-competitive basis;

• CCIL will submit a single aggregate bid (consisting of all RDG Account holders non-competitive bid in a particular security) to RBI on auction date;
• In case of SGB, the individual bids of each RDG Account holder is proposed to be sent to RBI;
• The RDG Account holders will be allowed to place bids and withdraw bids during the bidding interval or the period of subscription (for SGBs);
• Only one active bid will be allowed per retail client in the non-competitive portion for respective Security. In case of CG/SG/T-bill, the bidding will be in minimum & multiple of FV 10,000, in case of SGB, FV unit of 1 gram;
• The maximum limit per bid specified by RBI (presently Rs 2 crore for CG/T Bill and 1 percent for SG) will be validated;

Question: How will the payment be made for the bids placed on the RBI Retail Direct Portal?
Answer: For the Primary Auction market, a Bid is required to be backed by funding based on indicative price and accrued interest alongwith a Markup (as non-competitive allotment price shall be known only after auction cut off) for protection against any adverse price movement till Auction Settlement Date. The Markup will be refunded to the Investor post allocation based on the Cut Off Price for the Auction;

In case of SGBs, the funding will be based on Issue Price declared for the particular Issue;

For making payment for the bids, the retail clients can use services like UPI (Transfer or Block) and Net Banking to transfer funds to a designated current account using Payment Gateways linked to the Online Portal;

The funding of the bids can be done either at the time of bidding or at a later time, but, before the closure of bidding/subscription window. Bids which are not funded as on the date of submission of bids to RBI will be cancelled.

Question: When will the allotment be made and credited to the RDG Account?
Answer: Based on the allotment advice received as a part of the auction result, the allotments will be made to the Individual Investors;

In case of full allotment, each bidder will be allocated in full FV for which he/she had submitted the bid. In case of partial allotment, a pro-rata allotment will be made to the bidder based on the partial allocation percentage determined during the result declaration process;

Once the allotment is completed, the revised consideration for allotted bids shall be recomputed based on Weighted Average Price (WAP) declared by RBI in respective Security Auction;

On settlement date of Auction, post settlement at RBI, the RDG account shall be credited with the security to the extent of Face Value allotment;

In case of SGBs, post allotment of SGB units at RBI, the RDG account shall be credited with the SGB unit to the extent of allotment;

RDG account holders shall be provided with requisite queries to view the allotment on the portal. RDG account holders shall also be notified through a SMS message on their registered mobile and registered email;

Question: When will the excess mark up collected at the time of bidding be refunded?
Answer: After the weighted average price is announced by RBI, the excess markup,will be refunded to the Retail Direct Investor on the settlement date.

Such refunds will be processed by the online portal and will be remitted to the retail client’s respective bank accounts;

The retail client can view such details on the portal. Email and SMS will also be sent to the client about such updates;

Question: How can the NDS OM Secondary Market Portal be accessed?
Answer: The NDS OM Secondary Market Portal can be accessed through the RBI Retail Direct Portal. Each registered RD Investor opting for secondary market trading on NDS OM will be provided a CCIL ID. RDG will be permitted to access NDS-OM Order Matching Segment and Request for Quote (RFQ) Segment.

Question: What is the procedure for carrying out secondary market trades on NDS OM?
Answer: RDG Account holders can trade in CG/SG/T-bill/SGB, in the Odd Lot segment. RDG available balances would be transferred to NDS OM at the beginning of the day;

RDG can place sell orders only to the extent of balances available. Other transfers would be permitted in the RDG Account only after end of trading day;

RDG can place buy orders only after remittance of funds using service like UPI(Transfer/Block) and Net Baking through Payment Gateways linked to the NDS OM Retail Portal. Funds remitted by RDG shall be received in the designated current account with the Bank providing Payment Gateway;


Question: How does the secondary market settlement happen?
Answer: Trades executed by Retail Direct Investors will flow to CCIL for settlement. Settlement would happen on T+1 day;

Securities credit to RDG in respect of their purchases shall be made post completion of settlement on settlement date;

Fund credit to RDG in respect of their sale shall be made after completion of settlement on settlement date to their registered Bank Accounts;

In case the funds remitted by the Retail Direct Investor using the Payment Gateway is not received by CCIL, the securities purchased by the Retail Direct Investor may not be credited to the RDG Account, till the time the funds are received by CCIL from the Payment Gateway.

In case of a failure by a seller from whom the Retail Direct Investor has purchased a security, to deliver the concerned security, the funds remitted by the Retail Direct Investor will be refunded to the Retail Direct Investor on the settlement day.

Question: When will the excess money transferred for secondary market purchase be refunded?
Answer: The excess funds received from Retail Direct Investor after adjusted the trade consideration shall be refunded back to Retail Direct Investor on the date of receipt/settlement date;

Question: How will the corporate actions (coupon and redemption) on the RDG holdings serviced?
Answer: On receipt of coupon/ redemption proceeds from RBI, the exact entitlement of each RDG account holder will be computed based on their holdings;

The exact amount to be paid will be computed and remitted to the respective bank account of each RDG Account holder holding concerned security on the day of receipt from RBI;

The RDG account holders can view such Corporate Action details on the online portal;

Question: How can the Holding Statement of RDG Accounts be viewed?
Answer: The RDG Account holder will have access to information about his/her holding balances on a daily basis. Such information can be viewed on the portal by the RDG Account holder. Period Account Statements will also be mailed to the RDG Account Holder;

Question: What are the other services available under the Retail Direct scheme?
Answer: The following additional services are proposed to be made available to the Retail Direct Investor on the RBI Retail Direct Portal:
Nomination
Gifting
Pledge/Lein/Transfer

Question: What are the charges/fees payable?
Answer: No fee will be charged for opening and maintaining ‘Retail Direct Gilt account’ with RBI. No fee will be charged by the aggregator for submitting bids in the primary auctions. Fee for payment gateway etc., as applicable, will be borne by the registered investor.

Question: What is the Role of Clearing Corporation of India Ltd (CCIL)?
Answer: CCIL is authorized by the Reserve Bank of India to act as an aggregator for Primary Issuances and as Receiving Office for Sovereign Gold Bondsfor the Retail Direct Investors. CCIL is also authorized by RBI to operate the NDS OM platform.