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Current Affairs

RBI’s Retail Direct Scheme and integrated ombudsman scheme

Date: 16 November 2021 Tags: Miscellaneous

Issue

Prime Minister Narendra Modi has launched two new initiatives of RBI, the Retail Direct Scheme and the Integrated Ombudsman Scheme.

 

Background

The initiative is a part of efforts to deepen the financial inclusion and undertake people centric initiatives.

 

Details

The initiative was announced in February for giving public access to bidding in primary auctions as well as the central bank’s trading platform for government securities.

 

The Retail Direct Scheme

  • Under the scheme, retail investors will be able to buy and sell government securities (G-Sec) online from primary and secondary markets.

  • Investors can open gilt securities account with the RBI and invest in G-Secs. This account will be called Retail Direct Gilt (RDG) Account.

 

The process

  • Allotment will be through non-competitive scheme. Only one bid per security will be allowed. Amount has to be paid using net banking or UPI after successful submission of bid.

  • Secondary market can be accessed by registered investors. They can buy or sell government securities through NDS-OM.

 

Integrated Ombudsman scheme

  • It is a grievance redress mechanism for solving complaints of the customers against RBI’s regulated entities.

  • It is based on “One Nation-One Ombudsman” concept that has o ne portal, one email, and one address for customers to lodge their grievances.

  • Using a single email address, customers can submit complaints, track status, submit documents and give feedback.

  • For handling all kinds of grievances and queries, a multi-lingual toll-free number has been set up.

 

Importance

  • The RBI is unable to reduce borrowing rates as inflation is at higher level.  In such cases, the demand for bonds is also at the lowest.

  • The move is aimed at tapping wider market for government bonds. It will enable the government to raise funds from public more easily.

  • Due to surge in crude oil prices, the yields on 10-year government bonds have risen. They have eased after cutting of fuel tax.