government bonds: push for direct individual bets on government bonds to develop the market

The Reserve Bank of India will seek to directly promote individual investments in government bonds this fiscal year as the central bank is likely to expand market access and improve liquidity.

It will likely take “appropriate steps to further popularize the ‘RBI Retail Direct Scheme’ to enhance its overall reach for suitable retail investors across the country.”

Speculation is rife that the authorities will offer partial tax relief to attract retail investors to this investment.

The Reserve Bank of India intends to allow retail investors to open gold securities accounts directly with it under the “Retail Direct Scheme” “to encourage greater retail participation through improving ease of access to the G-sec market”.

It will aim to improve overall liquidity in the G-sec market by enhancing the role of bond houses known as primary dealers in market jargon in market making.

Over the last financial year, the retail plan was presented as a significant step in the development of the sovereign bond market while offering retail investors direct access to the G-sec market.

Individuals, including seniors, can earn up to 6.30% on 10-year term deposits with . However, they can earn more than 100 basis points more if the money is invested in the benchmark 10-year sovereign debt securities.

You can buy or sell on both the primary and secondary markets through a dedicated channel.

In line with this announcement, the RBI Retail Direct program, which is a one-stop solution to facilitate investment in public securities by individual investors, was released on July 12 last year.

Payments for primary and secondary market transactions can be made using a savings bank account through online banking or the unified payment interface.

Garland K. Long