RBI to launch a mobile app for investing in government securities

Reserve Bank of India Governor Shaktikanta Das on Friday announced plans for the launch of a mobile app for accessing the Retail Direct Scheme to engage in the government securities market. Das highlighted in his monetary policy statement that the introduction of the app will significantly enhance convenience for retail investors and contribute to the deepening of the G-sec market.

“It is now proposed to launch a mobile app for accessing the Retail Direct portal. This will be of greater convenience to retail investors and deepen the G-sec market,” he said.

Presently, retail investors have the option to invest in various financial instruments such as central government securities, treasury bills, state government securities, sovereign gold bonds, and floating rate saving bonds through the retail direct portal.

The introduction of the app will enhance transparency and streamline the process for retail investors, said market participants. They believe that the RBI's app will foster a fairer environment in the G-sec market. However, some express concerns that it could disrupt the market and present a notable challenge to market intermediaries.

“The introduction of a mobile app granting direct access to the retail portal for Government Securities (G-Secs) represents a proactive stride towards democratising investment opportunities, empowering individuals to participate more enthusiastically in the financial markets,” said Umesh Revankar, Executive Vice Chairman at Shriram Finance.

Market participants said that retail investors may feel more secure using the RBI's app, given its operation within a regulated framework. If the RBI's app provides lower transaction costs or even offers zero-cost transactions compared to other market intermediaries offering similar products, it could attract retail investors seeking to optimise their returns, they said.

“As a regulator, the RBI ensures compliance with regulatory requirements and safeguards investor interests. Retail investors may feel more secure using the RBI's app knowing that it operates within a regulated framework. If the RBI's app offers lower transaction costs or zero cost compared to other market intermediaries who offer the same products, it could attract retail investors looking to maximise their returns,” said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP.

The retail investors continue to invest more in treasury bills as compared to instruments like state and central government securities, and sovereign gold bonds through the scheme.

As of April 1, 67 per cent of the total subscriptions were channelled through T-bills, whereas only 14 per cent of subscriptions were through central government dated securities. Subscriptions through state government securities and sovereign gold bonds were 8 per cent and 7 per cent respectively. The subscriptions through floating rate saving bonds stood at 3 per cent.