New Delhi [India]: National Stock Exchange of India (NSE) has announced the launch of its “e – Gsec” platform for facilitating the non-competitive bidding in Government of India Dated Securities (G-Sec) and Treasury Bills (T-Bills). This will allow retail investors to invest in Government Securities and hold them in existing demat accounts.
The non-competitive bidding facility was introduced by the Reserve Bank of India (RBI) to encourage retail participation in the primary market for Government Securities. In continuation of this endeavor, the Union Budget 2016-17 had announced, inter-alia, that RBI will facilitate retail participation in the primary markets through stock exchanges.
The RBI conducts auction for G-Sec and T-Bills on a weekly basis where five percent of the notified amount is allotted for eligible investors under the scheme for non-competitive bidding facility.
Today’s launch of NSE’s e – Gsec platform provides investors an opportunity to participate in the G-Sec auction of April 26, 2018 and the subsequent weekly auctions of G – Secs and T-Bills.
“Non-competitive bidding through exchanges is an efficient mechanism for delivering government securities to retail clients. Promoting retail participation in government securities benefits both the issuer and the investor. For the Government it provides a diversified investor base and for retail investors an ability to diversify their investment portfolio to an asset class providing capital protection and decent returns. NSE will continue to offer simple retail products leveraging on its robust technology and retail distribution capabilities,” said MD & CEO, NSE, Vikram Limaye.
Investments in Government Securities are one of the safer investment options available to retail investors. Government Securities are risk free instruments, provides portfolio diversification and are available for longer investment durations.
NSE’s wider presence and reach through its members along with investor awareness and education initiatives may bring higher participation by retail in this asset class. (ANI)