PM Modi launches schemes to encourage small investors in money market, redress grievances

With the launch of the scheme, he said, "One Nation-One Ombudsman" has become a reality

In a first in the country, the government Friday launched a scheme where small investors can directly invest in central government securities that is considered a better investment option in the low interest-rate regime and saves an investor from the upheavals of share market.

The Retail Direct Scheme launched by Prime Minister Narendra Modi allows retail investors to buy and sell G-sec online both in the primary and secondary markets. It also allows direct investment in state development loans and sovereign gold bonds.

To buy and sell securities in the secondary market, the procedure is similar to buying and selling of shares.

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Before the start of trading hours or during the day, the investor must transfer funds to the designated account of CCIL (Clearing corporation of NDS-OM) online.

The move is likely to attract pensioners looking for assured returns for a long term and wish to play safe. According to experts, G-Sec investment will be safer than fixed deposits in the coming times.

Until now, the G-Sec market was dominated by institutional investors such mutual funds, banks and insurance companies. Since 2016, small investors too were allowed to bid for government papers but only in the secondary market.

The account, to be called Retail Direct Gilt (RDG) Account and can be bought in the primary market, would help the masses who do not have access to sophisticated financial services.

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“This will give a direct opportunity to earn interest in a safe way directly on their bank accounts. It could encourage financial inclusion and bring more money into the capital market from unorganized sector,” said Sonam Srivastava, Co-founder of Wright Research.

On the flip side, she said, the scheme will take retail money from banking system directly to the RBI’s kitty.

The Prime Minister also launched an integrated financial grievance redressal scheme that aims to improving the mechanism for resolving customer complaints against financial institutions such as banks and non-banking financial companies and digital payment systems.

The integrated ombudsman is a single point of reference for customers to file their complaints, submit documents, track status and provide feedback.

“The integrated Ombudsman scheme is likely to ensure uniformity and streamlined user-friendly mechanism which will add value to the scheme and bring customer delight and financial inclusion,” said Jyoti Praksh Gadia, MD, Resurgent India.

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