What is RBI Retail Direct Scheme?
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.
Who can open Retail Direct Gilt Account?
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.
What are the benefits of the Scheme?
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.
What are the facilities available on the RBI Retail Direct Portal?
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
- Gift Transactions
- Facilitate Corporate Actions such as:
- Coupon Payments
- Coupon Payments
What are the documents requiredfor opening a Retail Direct Gilt Account?
- 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.
What is the procedure for opening a Retail Direct Gilt Account?
- 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
What is permitted under Primary Issuances?
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;
How will the bidding happen using the RBI Retail Direct Portal?
- 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;
How will the payment be made for the bids placed on the RBI Retail Direct Portal?
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.
When will the allotment be made and credited to the RDG Account?
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;
When will the excess mark up collected at the time of bidding be refunded?
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;
How can the NDS OM Secondary Market Portal be accessed?
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.
What is the procedure for carrying out secondary market trades on NDS OM?
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;
How does the secondary market settlement happen?
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.
When will the excess money transferred for secondary market purchase be refunded?
- 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;
How will the corporate actions (coupon and redemption) on the RDG holdings serviced?
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;
How can the Holding Statement of RDG Accounts be viewed?
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;
What are the other services available under the Retail Direct scheme?
The following additional services are proposed to be made available to the Retail Direct Investor on the RBI Retail Direct Portal:
What are the charges/fees payable?
- 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.
What is the Role of Clearing Corporation of India Ltd (CCIL)?
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.