RAS question
The RBI's 'Retail Direct Gilt' account can be opened by which of the following?
Correct answer: (C) Any Indian citizen with a savings bank account and PAN.
An RBI Retail Direct Gilt account can be opened by an individual Indian retail investor, including an eligible NRI, who has a rupee savings bank account in India, PAN and valid KYC documents.
Explanation
The RBI Retail Direct Gilt account is meant for individual retail investors, not institutions. The cited PIB FAQ, sourced from RBI's Retail Direct FAQ, says individuals can open an RDG account if they have a rupee savings bank account maintained in India, a PAN issued by the Income Tax Department, an officially valid document for KYC, a valid email ID and a registered mobile number. It also notes that non-resident retail investors may open the account if they are eligible to invest in Government Securities under FEMA. Once opened, the account gives online access to government securities in primary auctions and to buying and selling in the secondary market.
Why the other options are wrong
- (A) Banks and primary dealers are institutional participants with existing direct access to the G-Sec market, while Retail Direct is framed for individual retail investors.
- (B) Eligible NRIs are included, but the account is not restricted to NRIs because resident individual retail investors who meet the savings-account, PAN and KYC requirements can also open it.
- (D) The scheme is specifically designed to widen individual retail participation in government securities, so limiting it to institutional investors reverses its purpose.
Concept
This tests financial-market access under the Indian Economy syllabus, especially how retail investors participate in the government securities market. It recurs in RAS because RBI schemes often connect institutional design with inclusion and market deepening.