NEW DELHI: The just lately launched Retail Direct Scheme by the Reserve Financial institution of India (RBI) will likely be instrumental in channelising the financial savings of the center class, small businessmen and senior residents instantly into risk-free authorities securities (G-Secs), stated the Financial Survey 2021-22, tabled within the Lok Sabha on Monday.
RBI Retail Direct Scheme was launched on 12 November 2021 as a one-stop entry to facilitate funding in authorities securities by retail buyers.
In accordance with the Survey, a vibrant secondary market offers alternative to the buyers to stability their portfolio as desired.
“Availability of presidency securities of as much as 40 years offers a large option to the buyers. Buying and selling although at the moment concentrated in few securities, is exhibiting indicators of extra even unfold… With an goal to facilitate environment friendly direct entry of retail particular person investor to the G-Sec market, which was earlier instantly being accessed solely by giant institutional buyers, this scheme will toughen monetary inclusion and broaden the investor base,” the Financial Survey stated.
Beneath the scheme, retail buyers can open a Retail Direct Gilt (RDG) account utilizing a web based portal by which they will instantly make investments a minimal of ₹10,000 and most of ₹2 crore per safety.
The retail buyers cannot solely place a non-competitive bid in major issuance of all central and state authorities securities akin to Treasury Payments and bonds but additionally entry the secondary market by Negotiated Dealing System-Order Matching (NDS OM), RBI’s buying and selling system, which was beforehand accessible solely to pick monetary establishments.
The Survey additionally highlighted that as of now, bulk of the G-Sec is held by few institutional buyers akin to industrial banks, insurance coverage firms and mutual funds.
“Diversified investor base offers flexibility to the federal government in its borrowing program. Additionally, it could allow secure demand for G-sec from totally different investor classes,” it added.
The Survey additionally highlighted that the share of mutual funds in India’s public debt elevated from 1.4% on the finish of March 2020 to 2.94% at March-end 2021. Public debt is essentially owned by institutional segments akin to banks, insurance coverage firms, provident funds and many others.
In the meantime, the share of business banks stood at 37.77% at end-March 2021, decrease than 40.4% at end-March 2020. Share of insurance coverage firms and provident funds at end-March 2021 stood at 25.3% and 4.44%, respectively. The share of RBI in public debt went as much as 16.2% at 31 March 2021 from 15.1% at end-March 2020.
In the meantime, as per the Financial Survey, internet property beneath administration (AUM) of the mutual fund business rose by 24.4% to ₹37.3 lakh crore on the finish of November 2021 from ₹30.0 lakh crore finish of November 2020.
Supply: Live Mint