RBI to launch mobile app for investing in government securities

Reserve Bank of India Governor Shaktikanta Das on Friday announced that it would launch of a dedicated mobile application for Retail Direct Scheme so that investors can make payments in a seamless way. Retail Direct scheme is a one-stop solution to facilitate investment in Government Securities by Individual Investors. It doesn't require any intermediaries or agents. Launched in 2021, this scheme serves as a comprehensive solution designed to simplify individual investors’ access to G-Sec investments.

"The RBI Retail Direct Scheme was launched in November 2021. It is now proposed to launch a mobile app for accessing the Retail Direct portal. This will be of greater convenience to retail investors and deepen the G-sec market," the central bank said in its statement on Friday.

Under this scheme, retail individual investors can easily open a Retail Direct Gilt (RDG) Account with the central bank through the dedicated online portal.

Investment options in the scheme cover primary and secondary markets. In the primary issuance of government securities, investors can join through the non-competitive scheme in government securities auctions, following the procedural guidelines for SGB issuance.

Investors can trade government securities on the NDS-OM platform in the secondary market, including the 'Odd Lot' and 'Request for Quotes' sections.

Therefore, the app can help in seamless transactions as payments can be done through savings bank accounts via Internet banking or UPI.

More and more retail investors are investing in Government Securities via the Reserve Bank of India’s Retail Direct (RBI-RD) Scheme. The number of accounts opened and total primary market subscriptions have gone up significantly.

The number of accounts opened under this scheme via the RBI-RD portal (https://rbiretaildirect.org.in) jumped 62 per cent year-on-year (YoY) to 1,09,212 as on January 1, 2024, against 67,591 as on January 2, 2023, per RBI data.

Total primary market subscriptions by individual investors in Government Securities (G-Secs) rose 178 per cent to Rs 3,548.25 crore as on January 1, 2024, against Rs 1,275.49 crore as on January 2, 2023.

Earlier this month, the RBI will conduct auctions for all central government securities through multiple price-based method from this financial year, nearly three years after it changed its methodology. Barring the ultra-long duration which consists of bonds maturing in 30 years and above, the RBI conducted auctions for bonds through uniform-based pricing since July 2021.

Under the multiple price auctions, buyers are allotted bonds at the price they bid at, while uniform pricing means bonds are sold at the cutoff level.
India aims to borrow Rs 7.50 lakh crore ($90 billion) via bonds in April-September, 53% of its annual borrowing target of 14.13 trillion rupees.
"All securities under the market borrowing programme shall, henceforth, be auctioned using multiple price auction method," the RBI said in a statement, following a review of market conditions.