The Reserve Bank of India (RBI) has made trading in Government bonds easier for retail investors, as they can now open an account with the central bank for this purpose.
According to a notification issued by the RBI, retail investors can open an account with it by following some user-friendly steps online and start trading in Government bonds.
It said that the portal will provide access to retail investors to the bond trading platform, which is normally meant for institutional investors. The central bank has not yet notified about the date from which this facility will be available for retail investors.
Investors can open a retail direct gilt or RDG account by providing any basic document needed for completing the basic KYC or ‘Know Your Customer’ formality. They can register themselves on the online trading portal by submitting a filled up online form and verify it by using the one-time password (OTP) received on their registered mobile number.
Once registration process is complete, the RDG account will be opened and the concerned steps to use the portal will be provided to the retail investor, a statement issued by the RBI said.
Even those retail investors who are not residents of the country, are also eligible for trading in government bonds, however they will have to adhere to Foreign Exchange Management Act (FEMA) rules.
The same account will also be valid for secondary market trading at Negotiated Dealing System – Order Matching (NDS-OM), as well as for placing bids in primary auctions.
In primary auctions, only one bid per security will be allowed and payment can be done through net banking. At the time of the submission of bids, funds will be blocked and will be debited depending upon the allotment.