The launch of the Retail Direct Scheme by the Reserve Bank of India enables broad-basing participation in the sovereign bond market by the investors. Explain (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The launch of the Retail Direct Scheme by the Reserve Bank of India appears to be aimed at broad-basing participation in the sovereign bond market to improve the demand for these securities.
· The Retail Direct Scheme is an additional channel now available to retail investors, but it is quite similar to the exchange route.
· The central bank is inviting small investors to open a retail direct gilt account with it through an online portal.
· Clearing Corporation of India Ltd is to act as the aggregator of these bids and participate in the auction. Retail investors are being asked to access secondary market through the NDS-OM platform.
· Government bonds carry interest rate risk and can result in capital loss, if they are not held till maturity.
· Small investors find it relatively harder to understand debt securities when compared to equities as data on retail holding in mutual funds reveal.
· The Centre should run an awareness campaign on government bonds, educating investors about the interest rate risk as well as their superiority as long-term investments.
· Offering income tax deductions for these instruments or to make tax treatment of direct gilt investing similar to taxation of debt mutual funds.
Dimpee Sonowal 3 years
Please review
IAS Parliament 3 years
Try to bring coherence in the answer and include data to support your arguments. Keep Writing.
K. V. A 3 years
Pls review
IAS Parliament 3 years
Good attempt. Keep Writing.
SHAILESH YADAV 3 years
IAS Parliament 3 years
Good answer, try to integrate the various dimensions. Keep Writing.
Sriram 3 years
Kindly review
IAS Parliament 3 years
Try to break down the sub-headings abd bring coherence in the nswer. Keep Writing.
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