Pillars of retail G-Sec market
Key reform India is the third country to allow retail participation in government securities market
Key reform India is the third country to allow retail participation in government securities market×
Creating a conducive and investor-friendly environment is key to enhancing retail investment in G-Secs
In the Union Budget for FY 2021-22, the government proposed to consolidate various statutory Acts, namely the Securities Exchange Board of India (SEBI) Act, 1992, and the Government Securities Act 2007, etc. into a rationalised single securities markets code.
Consequently, the Reserve Bank of India (RBI) allowed retail investors to participate in the government securities (G-Sec) market both primary and secondary through ‘Retail Direct’, an online portal for trading.
Edelweiss Mutual Fund Launches Edelweiss NIFTY PSU Bond Plus SDL Index Fund - 2026 NFO on March 10, 2021
Posted On: 2021-03-08 06:02:27 (Time Zone: Arizona, USA)
Edelweiss Asset Management Company Limited, one of India s fastest growing AMCs, announced the launch of Edelweiss NIFTY PSU Bond Plus SDL Index Fund - 2026 today. Passively managed, this first of its kind index fund will invest in AAA rated PSU Bonds as well as State Development Loans (SDL).
Key Highlights of the Edelweiss NIFTY PSU Bond Plus SDL Index Fund - 2026:
- India s first target-maturity, debt-index fund
- Will invest in State Development Loans (SDLs) plus PSU bonds
Updated Feb 16, 2021 | 08:26 IST
The RBI has recently allowed direct access in G-secs to retail investors. However, more operational clarity will emerge in the days to come. Investing in government securities: Do they suit your financial goals?
Government Securities (G-Secs) are one of the safest investing instruments available in the market. They are issued and backed by the central or state governments. So, they don t carry any default risk. This sovereign guarantee makes G-secs highly attractive for risk-averse investors. But because of the low risks, government securities offer low returns.
Earlier, retail investors were not allowed to participate directly to invest in the G-secs market and couldn’t open a gilt account which is used to hold the G-secs. However, Reserve Bank of India Governor Shaktikanta Das announced on February 5 that the government will permit retail investors to access the G-secs directly through a dedicated portal named ‘
Given the massive fiscal expansion scheduled for the next financial year Rs 12 lakh crore of government debt papers are set to flood the market analysts are of the view that the RBI is likely to let the market determine the yields and may not fixate on keeping the 10-year yield below 6 per cent as it did in 2020. This would indicate that the Reserve Bank is moving towards a new equilibrium for yields, something Governor Shaktikanta Das considers as a public good . The RBI left the policy rates unchanged as expected but reiterated its accommodative stance both on the interest rate as well as more importantly on the liquidity side for as long as it takes.
RBI likely to let market determine bond yields, says analysts
The RBI left the policy rates unchanged as expected but reiterated its accommodative stance both on the interest rate as well as more importantly on the liquidity side for as long as it takes. PTI
Reuters
Given the massive fiscal expansion scheduled for the next financial year Rs 12 lakh crore of government debt papers are set to flood the market analysts are of the view that the RBI is likely to let the market determine the yields and may not fixate on keeping the 10-year yield below 6 percent as it did in 2020.