RBI paves way for retail investors in bonds, govt securities

The Reserve Bank of India, or RBI, announced three major initiatives on May 28, 2024. These announcements are related to the common people, meaning you, and me. Among RBI’s significant initiatives, the first one is the RBI Retail Direct Mobile App. Through this, you will find it easy to buy and sell government securities. Second is the PRAVAAH portal, which will streamline your regulatory approval processes. The third is the FinTech Repository. Its aim is to gather information about the activities and technology of fintech companies. Let’s learn about each of these one by one.

First, let’s see in detail what is the RBI Retail Direct App? With this app, you can buy and sell government securities on your smartphone from the comfort of your home . Government securities include bonds issued by the central and state governments, treasury bills, and sovereign gold bonds, among others. In India, the central government issues treasury bills and bonds, known as dated securities, while state governments issue only bonds or dated securities, called State Development Loans (SDL).

In November 2021, RBI launched the Retail Direct Portal under the Retail Direct Scheme. Retail investors can invest in government bonds by opening a gilt account on rbiretaildirect.org.in. RBI’s Retail Direct Scheme allows retail investors to buy government securities in the primary market as well as trade government securities in the secondary market.

Now, with the launch of the RBI Retail Direct App, retail investors can transact in government securities through the app on their smartphones.

This app is available on the Google Play Store for Android users and on the App Store for iOS users. Simply type “RBI Retail Direct” on the Play Store to search and download the app.

RBI’s second major initiative is the PRAVAAH portal. PRAVAAH, which stands for Platform for Regulatory Application, Validation, and Authorization, is a secure and centralized web portal. Through this, any individual or entity can apply online for approval, licensing, or regulatory authorization related to matters connected with the Reserve Bank.

Let’s see what are the important features of the Pravaah portal. Well, you can apply online. Track and monitor the status of applications. Respond to clarifications sought by RBI. Receive timely responses from the Reserve Bank.

Currently, on the pravaah.rbi.org.in, 60 application forms covering various regulatory and supervisory departments of RBI are available. More forms will be made available as per requirement.

The third initiative is to launch the FinTech Repository. The objective of the FinTech Repository is to gather essential information about FinTech companies, their activities, and the technology being used. This initiative aims to encourage both regulated and unregulated FinTech companies to contribute to the repository. The FinTech Repository can be accessed through fintechrepository.rbihub.in.

Government securities, or G-Secs, practically carry no default risk. Because these come with government backing. Hence, these are considered risk-free instruments. Government securities are generally for conservative investors who do not want to take risks on their investments and seek fixed returns. Investing in G-Secs can also be done for portfolio diversification.