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RBI allows treasury bills investment via SIP in Retail Direct scheme
'To enable investors to systematically plan their investments, an auto-bidding facility for treasury bills (T-bills), covering both investment and reinvestment options, has been enabled in Retail Direct. The new functionality helps investors to mandate automatic placement of bids in primary auctions of T-bills,' RBI said.
The Retail Direct portal was launched in November 2021 to facilitate retail investors to open their gilt accounts with the RBI under the Retail Direct scheme. It allows retail investors to buy government securities (G-Secs) in primary auctions as well as buy and sell G-Secs in the secondary market.
According to RBI's recent data, the retail investors continue to invest more in treasury bills as compared to instruments like state and central government securities, and sovereign gold bonds through the scheme.
'We are expanding the functionality in RBI Retail Direct platform to enable retail investors to invest in treasury bills through systematic investment plans,' RBI governor Sanjay Malhotra said.
As of August 4, 68 per cent of the total primary market subscriptions were channelled through T-bills, whereas, only 10.4 per cent subscriptions were through central government dated securities. Subscriptions through state government securities, and sovereign gold bonds were 6.2 per cent, and 4.3 per cent respectively. The subscriptions through floating rate saving bonds stood at 11 per cent.
Since the launch of the scheme, RBI has introduced several new features, including the launch of a mobile app in May 2024.
According to experts, the new functionality is expected to support the market and indicates a proactive approach by RBI.
Vishal Dhawan, co-founder, Plan Ahead Wealth Advisors, said, 'This is a way to put money through the RBI direct platform into treasury bills for saving money towards either short-term or long-term investor needs. It has been one of the missing links as far as the debt side is concerned because most of the retail participation in debt has traditionally come through institutions like insurance companies, mutual funds, etc.'
Another treasury expert said, 'There is need for more clarity as the platform will have to introduce additional features to introduce SIP. Also, it is not likely to see a major difference in retail participation in the segment, unless there is a huge gap between deposit rates offered and the T-bill rates.'
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