RBI Allows Retail Investors To Open Gilt Accounts To Deepen Financial Markets

The Reserve Bank of India Governor Shaktikanta Das on Friday said that it has allowed retail investors to open gilt accounts with the Reserve Bank of India in order to deepen the financial markets. “It is proposed to provide retail investors with online access to the government securities market – both primary and secondary – directly through the Reserve Bank (‘Retail Direct’),” Mr Das said while announcing monetary policy committee’s decision to keep repo rates unchanged.

“The Central Government and the Reserve Bank have taken several measures to encourage retail investment in government securities. These include introduction of non-competitive bidding in primary auctions, permitting stock exchanges to route primary purchases and allowing a specific retail segment in the secondary market,” RBI governor said.

“This is a major structural reform placing India among select few countries which have similar facilities. This measure together with held-to-maturity (HTM) relaxation, will facilitate smooth completion of the Government borrowing programme in 2021-22,” he added.

RBI Governor Shaktikanta Das-led Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 4 per cent and the reverse repo rate untouched at 3.35 per cent. The policy decision comes at the end of the first meeting of the six-member Monetary Policy Committee (MPC) after Budget 2021.

The Reserve Bank has slashed its key lending rate i.e. repo rate by 115 basis points since March 2020 to cushion the economy from the shock of coronavirus crisis.

The RBI also pegged India’s economy to grow at 10.5 per cent in the next financial year lower than economic growth of 11 per cent predicted in the Economic Survey and 11.5 per cent pegged by International Monetary Fund.