What changed
RBI introduced the Retail Direct scheme, enabling retail investors to participate in non-competitive auctions of government securities and Treasury Bills through CCIL as aggregator. The updated scheme defines retail investors broadly, including individuals, firms, trusts, and others, and sets a 5% allocation cap for non-competitive bids. Regional Rural Banks and cooperative banks can bid directly for dated securities, while state governments, eligible provident funds, Nepal Rashtra Bank, Royal Monetary Authority of Bhutan, and any person/institution specified by RBI with government approval are covered only for Treasury Bills.
What it means for you
Banks and primary dealers can act as aggregators/facilitators, collecting retail bids and submitting them as a single non-competitive bid. This expands retail access to G-secs, potentially reducing banks' reliance on retail deposits for government funding. Banks must update their systems to support aggregation or direct customers to the RBI Retail Direct portal.
What you must do
- Evaluate whether to register as an aggregator/facilitator under the scheme to offer non-competitive bidding services to retail customers.
- Update internal systems to handle aggregation of retail bids and submission to CCIL for government securities auctions.
- Train customer-facing staff on the Retail Direct scheme to guide retail investors on eligibility, bid limits, and the aggregation process.
- Coordinate with CCIL for technical integration and compliance with the updated scheme guidelines.
Who it affects
Scheduled commercial banks, State and urban cooperative banks, Primary dealers, Specified stock exchanges (with SEBI NOC), Clearing Corporation of India Ltd, Retail investors (individuals, firms, trusts, etc.)
What is the minimum bid amount for retail investors under this scheme?
The minimum bid amount is ₹10,000 face value, and bids must be in multiples of ₹10,000 thereafter.
Can cooperative banks participate directly in non-competitive auctions?
Yes, Regional Rural Banks and cooperative banks can submit non-competitive bids directly for dated securities, as they maintain SGL and current accounts with RBI.
What is the allocation limit for non-competitive bids from retail investors?
Non-competitive bids are capped at a maximum of 5% of the aggregate nominal amount of the issue, within the notified amount set by the government.