Mumbai: The Reserve Bank of India has announced that retail investors can soon participate in gilt funds through a website directly administered by the Reserve Bank of India.
Gilts is short form for Government issued Long Term Stocks. In a note the apex bank said that its RBI Retail Direct Scheme will act as a one-stop facilitation center for investment in Government and government backed securities by individual investors.
RBI Retail Direct scheme will basically allow investors to:
The Reserve Bank of India is also expected to unveil NDS-OM, a screen based, anonymous electronic order matching system for trading in Government securities in the secondary market.
The securities available on the portal includes Government of India Treasury Bills, Government of India dated securities, Sovereign Gold Bonds (SGB) and even State Development Loans (SDLs).
Eligibility norms for retail investors are as follows:
The RDG account with the RBI will not carry any charge. RBI is not billing aggregators for submitting bids in primary auctions. However, there could be charges and fees to be paid for using the payment gateway services.
Although gilt funds are perceived as safe since they are government backed securities, in reality growth prospects for such funds hovers around major policy announcements. In fact, returns on debt schemes turned to negative in 2018 and ditto for long term debt funds in 2021.
More additional information regarding the RBI portal and details of schemes is expected soon.