Updated on: Friday, November 12, 2021, 01:07 PM IST

PM launches two customer-centric initiatives of RBI; allows retail investors to buy govt bonds directly

RBI's two innovative customer-centric initiatives will increase investment avenues, make accessing capital market easier, safer, said the prime minister. | Twitter/RBI

RBI's two innovative customer-centric initiatives will increase investment avenues, make accessing capital market easier, safer, said the prime minister. | Twitter/RBI


Prime Minister Narendra Modi launched two innovative customer-centric initiatives of the Reserve Bank of India (RBI) today (November 12).

Union Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das also attended the event.

The RBI's two innovative customer-centric initiatives will increase investment avenues, make accessing capital market easier, safer, said the prime minister.

"These initiatives are the RBI Retail Direct Scheme and the Reserve Bank - Integrated Ombudsman Scheme," PMO in a release said.

"Retail direct scheme has given small investors in the country a simple and safe medium of investment in government securities. Similarly, One Nation, One Ombudsman System has taken shape in the banking sector with the Integrated Ombudsman Scheme today. The two schemes that have been launched today will expand the scope of investment in the country and make access to capital markets easier, more secure for investors," the PM said after the launch.

RBI's retail direct and the integrated ombudsman scheme will widen the investment horizon for investors and make capital markets more accessible to the investors, Narendra Modi said.

The initiative was first flagged off by RBI Governor Shantikanta Das in February 2021. The governor has called it a 'major structural reform'.

RBI Governor Shaktikanta Das said this scheme will help customers to invest in G-secs which carry almost zero default or credit risk.

The move was intended at improving ease of access by retail investors through online access to the government securities market – both primary and secondary — along with the facility to open their gilt securities account (‘Retail Direct’) with the RBI.

What is the scheme about

The RBI Retail Direct Scheme is aimed at enhancing access to the government securities market for retail investors. Government securities are basically debt issuances by the government. It offers investors a new avenue for directly investing in securities issued by the Government of India and the State Governments.

'Investors will be able to easily open and maintain their government securities account online with the RBI, free of cost," PMO said.

The Reserve Bank - Integrated Ombudsman Scheme aims to further improve the grievance redress mechanism for resolving customer complaints against entities regulated by RBI.

"The central theme of the scheme is based on 'One Nation-One Ombudsman' with one portal, one email and one address for the customers to lodge their complaints. There will be a single point of reference for customers to file their complaints, submit the documents, track status and provide feedback. A multi-lingual toll-free number will provide all relevant information on grievance redress and assistance for filing complaints," it added.

How to open RDG account

The RDG account could be opened by filling up the online form.

Use the OTP received on the registered mobile number and e-mail id to authenticate and submit the form.

Payment can be made through net-banking/UPI facility from the linked bank account.

Refund, if any, will be credited to the investor’s bank account as per the timelines specified by the aggregator.

India Inc reactions

Market will get broad-based, volumes will increase

Jyoti Prakash Gadia, Managing Director, Resurgent India, said, "With the entry of small retail investors for Government securities, the market will get broad-based and volumes will increase, with more opportunities and ease of investments. The single national-level integrated digital portal for the RBI ombudsman scheme is expected to ensure uniformity and a streamlined user-friendly mechanism that will add value to the scheme and bring customer delight and financial inclusion. This may help in evolving better processes too, based on holistic analysis. Besides highlighting the coordinated approach of RBI and the Government for inclusive growth the PM also highlighted the efforts made in the direction of a better credit culture ecosystem and strengthening of the Banking system"

Key is in execution

Sonam Srivastava, Co-founder, Wright Research, said, "This scheme is a big step towards financial inclusion, ease of access, and a significant leap in digital India, focusing on Fintech. In addition, small investors will have an opportunity to directly invest in Government securities that are as safe or safer than a Fixed deposit and more directly linked to the Government int. rates. The One-Ombudsman scheme centralizes grievance redressal and focuses on preventing financial crime and catching cyber fraud through artificial intelligence promises to encourage investor trust.

"Before we cheer for these schemes, we should look back at the central government’s track record in the execution of big digital plans. While UPI and Aadhar have worked well, but one cannot ignore the bad memory of GST or the more recent Income Tax website fiasco. So we should wait and watch the execution of these schemes before cheering for their impact."


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Published on: Friday, November 12, 2021, 11:53 AM IST