RBI Notifies Retail Direct Scheme

RBI has notified its retail direct scheme which encourages retail participation in government securities


Reserve Bank of India (RBI) has notified its retail direct scheme, under which retail participation will be encouraged in government securities by providing prices and quotes to retail direct gilt (RDG) account holders, which will help them in trading in securities.

The scheme had been launched by the prime minister on November 12, 2021, where retail investors have the facility to open an online RDG account with RBI. These accounts can be linked to their savings bank accounts.

The RDG accounts of individuals can be used to participate in the issuance of government securities and secondary market operations through the screen-based NDS-OM.

NDS-OM or Negotiated Dealing Segment– Order Matching, refers to the RBI’s screen-based, anonymous electronic order matching system for trading in government securities in the secondary market.

In this connection, to provide liquidity in the secondary market, a market making arrangement, wherein the primary dealers shall be present on the NDS-OM platform throughout market hours and respond to buy/sell requests from Retail Direct Gilt Account Holders (RDGAHs) has been notified.

According to the market making scheme, primary dealers will rely on the Know Your Customer (KYC) verification of the RDG account holders done under the retail direct scheme.

“No further KYC verification is required for transacting with RDG account holders on the request for quotes (RFQ) segment of NDS-OM,” the RBI said.

The RFQ segment refers to the on-screen negotiation system of the RBI’s NDS-OM system.

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