RBI permits retail buyers to open G-Sec accounts to straight take part in authorities securities

Image Source : PTI (FILE) RBI permits retail buyers to open G-Sec accounts to straight take part in authorities securities
The Reserve Bank of India on Friday introduced a significant structural reform to permit retail buyers to straight take part in authorities securities. RBI Governor Shaktikanta Das stated that retail buyers will quickly be capable to open Gilt (G-Sec) accounts with the central financial institution. The transfer will assist deepen bond markets within the nation.
The financial institution will quickly challenge pointers for the method to open accounts. The platform shall be known as “Retail Direct”.
With this, India will be a part of a handful of nations the place retail buyers have direct entry to authorities bonds – each main and secondary.
“This will broaden the investor base and provide retail investors with enhanced access to participate in the government securities market. This is a major structural reform placing India among select few countries which have similar facilities,” he stated.
What is G-Sec
A Government Security (G-Sec) is a tradeable instrument issued by the Centre or states. It acknowledges the federal government’s debt obligation. Such securities are quick time period (often known as treasury payments, with authentic maturities of lower than one 12 months) or long run (often known as Government bonds or dated securities with authentic maturity of 1 12 months or extra).

In our nation, the Centre points each, treasury payments and bonds or dated securities whereas the states challenge solely bonds or dated securities, that are known as the State Development Loans (SDLs).
G-Secs carry virtually no danger of default and, therefore, are known as risk-free gilt-edged devices.
The RBI’s transfer is aimed toward encouraging retail funding in authorities securities.
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