On 12th November 2021, our honorable Prime Minister Narender Modi has launched two new schemes for retail investors with an approach to customer-centric & innovation. Let’s try and understand the RBI RDG Account.
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What is RBI Retail Direct Gilt Account?
These two schemes are launched to ease access to the government securities market, especially for retail investors.
This will deepen the interest in the debt market and enhance the customer experience by addressing their grievances.
This scheme is in line with the motto “One Nation, One Ombudsman System” via one portal, one email address, and one postal address to lodge their complaints and facilitate a safe medium of investment in government securities
Retail Investors (Individuals) in India can now directly invest in Government Securities (i.e. Treasury Bills, dated securities, Sovereign Gold Bonds, State Development Loans).
Retail investors can now register for a Retail Direct Gilt Account (RBI RDG Account) by registering under the special account. Thus, they can invest directly in G-Secs.
The Retail Direct Scheme is a comprehensive scheme that provides the following facilities to retail investors in the G-Sec market through an online portal:
- Open and maintain a RDG Account
- Access to primary issuance of G-Secs.
- Access to NDS-OM.
In addition, these facility is available for free through the Dedicated Online Portal. However, investors may have to pay a Payment Gateway fee.
According to an RBI website, using the RDG account, a saver can buy from the primary market.
The same account will be valid for secondary market trading at NDS-OM (i.e. Negotiated Dealing System – Order Matching), as well as for placing bids in primary auctions.
Generally, NDS-OM means RBI’s screen-based, anonymous electronic order matching system for trading in G-Secs in the secondary market.
Let’s try and understand the Features of the RBI RDG Account.
Features of RDG
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| Feature | Description |
|---|---|
| Eligibility | Retail investors, as defined under the scheme, can register under the Scheme and maintain an RDG Account, if they have the following: 1. Savings bank account(Rupee) maintained in India. 2. PAN issued by the Income Tax Department. 3. Valid email id. 4. Registered mobile number. 5. KYC (Know Your Customer) documents. c. The RDG account can be opened singly or jointly with another retail investor who meets the eligibility criteria. |
| NRI | NRIs can open this account provided they comply with the Foreign Exchange Management Act. |
| Account Services | 1. Access to primary issuance of Government securities. 2. Access to NDS-OM. |
| Fee and Charges | No fee will be charged for opening and maintaining an RBI RDG account. |
| Nomination facility | There can be a maximum of two nominees. |
| Transactions | Account holder(s) will have an online facility to gift G-Secs to other Retail Direct Investors. |
| Account Statement | Transaction history and balance position of securities holdings in the account can be obtained from the link provided. However, all transaction alerts will be provided via e-mail or SMS. |
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What are the Facilities of RBI RGD Account?
Using the online portal, the account holder(s) can access the auctions and the NDS-OM platform, i.e. the RBI platform for buying and selling G-Secs, Bonds, etc., and other money market instruments in the secondary market.
- On-boarding of Retail Direct Investors.
- Opening and management of RDG Accounts.
- Facilitate participation in Non Competitive Bidding in Primary G-sec Auctions through the Clearing Corporation of India (CCIL).
- Investing in Sovereign Gold Bonds (SGBs) through CCIL.
- Facilitate NDS OM access to Retail Direct Investors for secondary market trading and settlement of such trades through CCIL.
- Provide Investor Services such as:
- Account Statement
- Nomination Facility
- Pledge/Lien
- Gift Transactions
- Facilitate Corporate Actions such as:
- Coupon Payments
- Coupon Payments
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How to Access NDS OM Secondary Market Portal?
The NDS OM Secondary Market Portal can be accessed through the RBI Retail Direct Portal.
Each registered RD Investor opting for secondary market trading on NDS OM will be provided a CCIL ID.
RDG will be permitted to access NDS-OM Order Matching Segment and Request for Quote (RFQ) Segment.
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Bidding Process
- The participation of RDG Account holder, in CG/SG/T-bill Primary Auctions will be on non-competitive basis.
- CCIL will submit a single aggregate bid (consisting of all RDG Account holders non-competitive bid in a particular security) to RBI on auction date.
- In case of SGB, the individual bids of each RDG Account holder is proposed to be sent to RBI.
- The RDG Account holders will be allowed to place bids and withdraw bids during the bidding interval or the period of subscription (for SGBs).
- Only one active bid will be allowed per retail client in the non-competitive portion for respective Security.
In case of CG/SG/T-bill, the bidding will be in minimum & multiple of FV 10,000, in case of SGB, FV unit of 1 gram. - The maximum limit per bid specified by RBI (presently Rs 2 crore for CG/T Bill and 1 percent for SG) will be validated.
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Allotment Process
Based on the allotment advice received as a part of the auction result, the allotments will be made to the Individual Investors.
In case of full allotment, each bidder will be allocated in full FV for which he/she had submitted the bid.
In case of partial allotment, a pro-rata allotment will be made to the bidder based on the partial allocation percentage determined during the result declaration process.
Once the allotment is completed, the revised consideration for allotted bids shall be recomputed based on Weighted Average Price (WAP) declared by RBI in respective Security Auction;
On settlement date of Auction, post settlement at RBI, the RDG account shall be credited with the security to the extent of Face Value allotment.
In case of SGBs, post allotment of SGB units at RBI, the RDG account shall be credited with the SGB unit to the extent of allotment.
RDG account holders shall be provided with requisite queries to view the allotment on the portal.
RDG account holders shall also be notified through a SMS message on their registered mobile and registered email.
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Coupon or Redemption Process
On receipt of coupon/ redemption proceeds from RBI, the exact entitlement of each RDG account holder will be computed based on their holdings.
The exact amount to be paid will be computed and remitted to the respective bank account of each RDG Account holder holding concerned security on the day of receipt from RBI.
The RDG account holders can view such Corporate Action details on the online portal.
How to Open an RBI RDG Account Online?
Time needed: 1 hour
Eligible customer can open their RDG account online in a few simple steps:
- URL
Visit this URL for opening an RBI Retail Direct account via: https://www.rbiretaildirect.org.in/
On top of the page, you will find Open RBI Retail Direct Account in the radio button option in orange color. - Single or Joint Account
After clicking on the radio button You need to select the account type from the dropdown menu whether to open a single or joint account.
- Account Holder Details
Post account type selection, you need to enter First account holder details like Full Name, PAN Number, Email address, Mobile Number, Date of Birth, Login Name. In the case of a joint account, except for the login name rest, all details need to be furnished for the secondary account holder.
- Email Address and Mobile Number
Verify the email address and mobile number by keying the OTP received on the email address and mobile number.
- T&C
Click on the tick box for confirming read their terms and condition and proceed with previewing your application and submission.
- KYC
Post successful registration you need to initiate the KYC verification process using the option provided in the red button. Post-clicking on the red button will list out the documents you need while doing KYC Verification.
- Documents
Post arranging all the required documents click on Start Button it will direct you to the instruction page with online and offline KYC options.
- CKYC
In case you proceed with CKYC click on the Next button. It will record your document and details. Then proceed with submitting your application.
- CKYC Number
Click on the Next Button provide three steps will be there to search the CKYC number By PAN.
- DOB/DOI
It will pull up your CYKC number and prompt you to select Auth Factor Type as DOB/DOI.
- Re-Submit
Post verifying your DOB, search for CKYC details, it will give you two options to re-submit details or upload the edited files.
- Additional Information
Once CKYC Details are submitted it will ask you to provide additional personal information like occupation type, qualification, income level. residential status, country of birth, state of birth.
- Residency Details
Post recording your additional personal details click on the Next button. to furnish tax residency details as shown in the below screenshot.
- PMLA and FATCA
Do provide your consent to fill your application by filing your PMLA and FATCA Declaration.
- Permanent Address
Post submitting the above declaration confirm your permanent address same as CKYC/Aadhar address and correspondence address same as a permanent address, it will route you to step 3 to upload your signature.
Note: Supported files are .jpge, jpg, png, pdf, and the max size accepted is 5MB. - Digital Signature
Once successfully upload your digital signature it will prompt you to verify the list of approved banks.
- Bank Account
It will direct you to bank account verification that is 3 steps process from uploading your bank cheque and clicking on the consent given.
- Amount
Post successful bank account verification post entering the amount. Click on next.
- Nominee
Key in your nominee details as shown in the screenshot.
- Review
Review your application and submit your form.
- E-sign
Post your application is received by RBI, you need to e-sign the link received on your registered mail for OTP authentication.
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Advantages of RDG Account
| Retail investors (individuals) will have the facility to open and maintain the ‘Retail Direct Gilt Account’ (RDG Account) with RBI. |
| The investor can place non competitive bids in Primary issuance of all Central Government securities (including Treasury Bills and Sovereign Gold bonds) as well as securities issued by various State Governments. |
| Under this scheme, the individual can also access Secondary market through “NDS OM” – RBI’s trading system. The investor will automatically receive any interest paid/maturity proceeds into his linked bank account on due dates. |
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