NEW DELHI: Prime Minister Narendra Modi and Reserve Bank of India Governor Shaktikanta Das today announced two new initiatives by the central bank – a retail direct scheme for investment in the government bond market and a fresh ombudsman scheme that integrates previous watchdog schemes.
Das said the new retail scheme would widen the investor base for government securities market and create an ecosystem for retail investors.
The Indian bond market has traditionally been dominated by banks, institutional investors (such as insurance companies) and foreign institutional investors.
There is a pressing need for the government to find fresh sources of financing its fiscal deficit and its burgeoning borrowing programme – which for the current financial year stands at a whopping Rs 12.06 lakh crore.
Das said that the launch of the scheme represented democratization of the Indian government securities market and that India was setting a global example by doing so.
Prime Minister Modi, while lauding RBI’s efforts to steer the economy through the COVID-19 crisis, said the new ombudsman scheme would go a long way in aiding retail investors.
Modi also said that small investors who so far have the options of parking money in bank deposits, mutual funds and certain other financial services would now have the option of depositing their funds in the safest possible financial asset – a sovereign-backed government bond.
Investments from retail investors would also help the country to strengthen infrastructure investments, Modi said.
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