New Delhi: Providing salaried class, pensioners and retail investors direct access to government securities market, Prime Minister Narendra Modi on Friday launched the Reserve Bank of India’s (RBI) Retail Direct Scheme.
Under the scheme, small individual investors could open Retail Direct Gilt Account’ (RDG Account) with the RBI and buy government securities. The scheme seeks to widen the investor base for government securities by creating an ecosystem whereby retail investors can easily participate in the government securities market which has so far been dominated by institutional investors.
Besides increasing retail participation in the government securities, the scheme would deepen the bond market and allow a fair, market determined rates across the yield curve, noted Finance Minister Nirmala Sitharaman while speaking at the virtual launch event. RBI Governor Shaktikanta Das said that by launching the Retail Direct Scheme India is setting an example of democratization of the government securities market. Launching the scheme, PM Modi said that it is simple, safe and secured medium for small investors to invest in government securities.
He also launched Integrated Ombudsman Scheme of the central bank which seeks to further improve the grievance redress mechanism for resolving customer complaints against banks, NBFCs and payment system operators and all other entities regulated by RBI. The Integrated Ombudsman Scheme would subsume all previous such schemes and offer the benefits of a single platform to customers for getting speedy resolutions of their grievances. The integrated scheme is expected to reinforce people’s confidence and trust in the financial system.
Launching the scheme virtually, the Prime Minister said that through integrated ombudsman scheme “One nation One ombudsman” system has been put in place in the banking sector. “The launch of two people-centric schemes of the RBI will ensure widening of the scope of accessing capital markets for retail investors,” Modi 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,” he said.
The Prime Minister said that in the last 7 years, non-performing assets (NPAs) were identified with transparency, the focus was on resolution and recovery, public sector banks were recapitalized, one after the other reforms were carried out in the financial system and public sector banks.
He noted that in order to further strengthen the banking sector, cooperative banks were also brought under the purview of RBI. Due to this the governance of these banks is also improving and the trust in this system is getting stronger among the depositors, he added.
The Prime Minister said that till 6-7 years ago, banking, pension and insurance, used to be like an exclusive club in India. “All these facilities were not accessible to the common citizens in the country, poor families, farmers, small traders-businessmen, women, deprived and backward, etc,” Modi said.
