The Reserve Bank of India (RBI) made a significant announcement for retail investors in its monetary policy update on August 6.
RBI said it will expand the scope of the Retail Direct Platform, allowing individual investors to invest in Treasury Bills (T-bills) through SIP (Systematic Investment Plan).
The goal is to make investing in government securities easier and more accessible for regular investors.
Invest in Treasury Bills Like Mutual Funds
RBI Governor Sanjay Malhotra said that new tools will be introduced under the Retail Direct Platform. These tools will help investors manage their investments more easily.
Just like SIPs in mutual funds, investors will now be able to invest in Treasury Bills through SIPs. Market experts have welcomed this step as a positive move for retail investors.
What Are Treasury Bills?
Treasury Bills, or T-bills, are short-term government securities. They are used by the government to raise funds for periods of up to one year.
T-bills do not pay any interest. Instead, they are sold at a discount and redeemed at face value on maturity.
Currently, retail investors cannot invest in T-bills directly, but they can do so indirectly through mutual fund liquid schemes.
Retail Direct Platform Started in 2021
RBI launched the Retail Direct Platform in 2021. This platform allows individual investors to buy government securities in primary auctions, and also trade them in the secondary market. To access this, investors need to open a gilt account.
New Facilities for Investment and Reinvestment in T-Bills
On August 6, the RBI Governor said that investing in T-bills will soon become more streamlined.
Investors will be able to plan their investments systematically, with the help of an auto-bidding facility.
This new system will support both initial investment and reinvestment in Treasury Bills.
It will allow retail investors to automatically place bids in the primary auctions of T-bills, making the whole process smoother and more convenient.
