The Reserve Bank of India (RBI) made a big announcement for retail investors in its monetary policy update on August 6.
The central bank said it will expand its Retail Direct platform, allowing retail investors to invest in Treasury Bills (T-bills) through Systematic Investment Plans (SIP)—just like mutual funds.
The goal is to make it easier for individuals to invest in government securities.
RBI Governor Sanjay Malhotra said that new tools will be introduced on the Retail Direct platform to help investors manage their investments more easily. Experts have welcomed this move.
What Are Treasury Bills and How Will It Work?
Treasury Bills (T-bills) are short-term government securities used to raise money for up to one year. These bills do not pay interest but are issued at a discount and redeemed at face value on maturity.
Currently, retail investors cannot directly invest in them, but they can access them indirectly through mutual fund liquid schemes.
The Retail Direct platform, launched by RBI in 2021, allows individuals to buy government securities in both primary auctions and secondary markets.
To use the platform, investors must open a gilt account.
New Features: Auto-Bidding and Reinvestment Option
To make investing in T-bills easier, the RBI will introduce an auto-bidding feature, which will help retail investors plan their investments systematically.
This feature will allow automatic placement of bids in primary auctions and provide the option for both investment and reinvestment in Treasury Bills.
This is expected to make government securities more accessible and manageable for small investors.
