RBI announced a direct retail program that encourages retailer participation in government securities
Mumbai:
The Reserve Bank of India (RBI) has announced its direct retail plan whereby retail participation will be incentivized in government securities by providing prices and quotes to owners. direct gold-plated (RDG) retail accounts, which will help them trade stocks.
This plan was introduced by the prime minister on 12 November 2021 where retail investors have the facility to open an online RDG account with RBI. These accounts can be linked to their savings bank accounts.
Individuals’ RDG accounts can be used to participate in government securities issuance and secondary market operations through the screen-based NDS-OM.
NDS-OM or Negotiable Trading Segmentation – Order Execution, refers to RBI’s screen-based anonymous electronic matching system for trading government securities on the secondary market.
In this connection, to provide liquidity in the secondary market, a market-making arrangement in which primary dealers will be available on the NDS-OM platform during business hours and respond to requests Buy/sell requests from Direct Retail Gold Plated Account Holders (RDGAHs) have been notified.
Under the market-making plan, key dealers will rely on Know Your Customer (KYC) verification of RDG account holders implemented under the direct retail plan.
“There is no need for additional KYC verification to transact with RDG account holders on request for quote (RFQ) of the NDS-OM segment,” RBI said.
The RFQ segment refers to the on-screen negotiation of the RBI NDS-OM system.
