The Reserve Bank of India earlier this week introduced three new facilities for consumers — Pravaah, Retail direct app and FinTech repository. Out of these three, the Retail Direct Mobile App has been introduced to facilitate seamless and convenient access to the retail direct platform for retail investors and ease of transacting in government securities (G-Secs).
With the launch of this app, retail investors can now transact in G-Secs using the mobile app on their smartphones. Investors using Google Android can download the app from the Play Store and those using iPhone iOS can download it from App Store.
ETBFSI gives you a detailed FAQ to understand what the Retail Direct Mobile Application is, how it functions, what are its uses and more.
What is RBI’s Retail Direct Mobile App?
As per the RBI’s circular, Retail Direct mobile app will provide retail investors with a seamless and convenient way to transact in government securities (G-Secs) on their smartphones.
The app simplifies the process of buying and selling G-Secs in both the primary and secondary markets.
Just like investment apps allows one to easily buy and sell investments, track portfolio performance, and access market data all through a single application, this Retail Direct Mobile App helps create a user-friendly interface for retail investors.
The app is an extension of RBI’s Retail Direct scheme, which was initially introduced in November 2021.
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What purpose does the Retail Direct Mobile app solve?
The Retail Direct mobile application is aimed at facilitating seamless investment in government securities by retail investors.
Using this app, investors can buy central and state government bonds as well as Treasury bills. The move is aimed at enhancing individual participation in government bonds.
RBI Retail Direct Scheme gives access to individual investors to maintain gilt accounts with the RBI and invest in government securities.
The scheme enables investors to buy securities in primary auctions as well as buy/sell securities through the NDS-OM platform. From the issuer‘s point of view, a diversified investor base for government bonds ensures stable demand for G-sec.
Further, a mixed investor base with different risk preferences, time horizons and trading motives ensures active trading, thus creating liquidity and also allows the Government to raise borrowings at a reasonable cost. On the other hand, from the investors‘ point of view, it provides an alternative investment option with decent returns and capital protection.
How to use the application?
The app enables investors to buy and sell instruments on the go, at their convenience.
Payments for transactions can be done conveniently using a savings bank account through internet-banking or Unified Payments Interface (UPI).
Investor services include provisions for transaction and balance statements, nomination facility, pledge or lien of securities and gift transactions. No fees will be charged for facilities provided under the scheme.
Investors can obtain help and other support facilities on the portal itself and also through a toll-free telephone number 1800–267-7955 (10 am to 7 pm) and email.
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What is the scope of the Retail direct scheme?
Retail participation by individuals in the G-sec market has been very limited earlier, because investors in the Government securities market in India are mostly institutions like commercial banks, co-operative banks, regional banks, provident funds, insurance companies, pension funds, mutual funds and non-banking finance companies (NBFCs).
Through RBI’s retail direct platform comes a scope of promoting retail participation in the G-sec market directly which is beneficial to both the issuer and the investor.
The Retail Direct scheme by RBI is a comprehensive scheme which provides facilities like — Open and maintain a ‘Retail Direct Gilt Account’, access to primary issuance of government securities, and access to NDS-OM in government securities market through an online portal.
Retail investors have the scope to open and maintain the ‘Retail Direct Gilt Account’ with RBI. Retail Direct Gilt Account means a gilt account maintained in the books of RBI under the Retail Direct Scheme.
Who can use it & where can users get the application?
Retail investors, as defined under the scheme, can register under the scheme and maintain an RDG Account, if they have a savings bank account in India, a valid PAN id issued by the Income Tax Department of government, an OVD for KYC purpose, a valid email id and mobile number.
Non-resident retail investors eligible to invest in Government Securities under the Foreign Exchange Management Act, 1999 are also eligible under the scheme.
The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria.
Investors using Google Android can download the app from the Play Store and those using iPhone iOS can download it from App Store.
The mobile app can also be downloaded using a QR code, the RBI said in its circular.
