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THE RESERVE BANK OF INDIA HAS ANNOUNCED MARKET-MAKING STRATEGY TO ENCOURAGE RETAIL INVOLVEMENT IN G-SECURITIES

by admin

Date & Time: Jan 05, 2022 11:00 PM

Read Time: 2 minute



RBI News Highlights :

  • Prime Minister Narendra Modi announced the RBI Ordinary Direct Scheme on November 12, 2021.
  • The Reserve Bank of India (RBI) announced a market-making plan

What is in News?

Prime Minister Narendra Modi announced the RBI Ordinary Direct Scheme on November 12, 2021, with the goal of providing one-stop access for retail investors to buy in government assets.

Market-Making Plan

The Reserve Bank of India (RBI) announced a market-making plan recently to encourage retail participation in government securities by providing prices/quotes to RDG account holders, allowing them to purchase and sell securities under the RBI Retail Direct Scheme.

RBI Ordinary Direct Scheme

Prime Minister Narendra Modi announced the RBI Ordinary Direct Scheme on November 12, 2021, with the goal of providing one-stop access for retail investors to buy in government assets.
In this regard, a market making arrangement has been notified, under which primary dealers will be present on the NDS-OM platform (odd-lot and Request for Quotes segments) throughout market hours and respond to buy/sell requests from Retail Direct Gilt Account Holders (RDGAHs) in order to provide liquidity in the secondary market.

Primary dealers would rely on the Know Your Customer (KYC) verification of RDG account holders conducted under the retail direct scheme under the market making scheme.

RBI Statement

The RBI stated that "no additional KYC verification is required for trading with RDG account holders on the RFQ portion of NDS-OM."
The RBI's screen-based, anonymous electronic order matching system for dealing in government securities in the secondary market is known as NDS-OM, or Negotiated Dealing Segment Order Matching.
The 'Request for Quotes (RFQ) section' refers to the RBI's NDS-OM system's on-screen negotiation system.

Retail investors (individuals) can create an online Retail Direct Gilt Account (RDG Account) with RBI under the RBI Retail Direct Scheme.
These accounts can be linked to their bank accounts for savings. Individuals' RDG Accounts can be used to engage in government securities issuance and secondary market operations via the screen-based NDS-OM.

Also Read: AIRTEL PAYMENT BANK मिलेंगी खास सुविधाएं, मिला शेड्यूल बैंक का दर्जा!

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