On 12 Nov. 2021, Prime Minister Narendra Modi launched two customer-centric initiatives of the Reserve Bank of India (RBI)— The RBI Retail Direct Scheme and the Reserve Bank Integrated Ombudsman Scheme.
Both the scheme will extend the scope of investment in the country and make access to capital markets easy and more secure for investors.
With the RBI Retail Direct Scheme, small investors in the country have achieved a safe medium of investment in government securities.
With Reserve Bank-Integrated Ombudsman Scheme, ‘One Nation, One Ombudsman System’ has taken shape in the banking sector.
What is RBI Retail Scheme?
Retail Direct scheme is a one-stop solution to facilitate investment in Government Securities by Individual Investors. Under this scheme, Individual Retail investors can open a Gilt Securities Account – “Retail Direct Gilt (RDG)” Account with the RBI.
It offers them a new avenue for directly investing in the securities issued by the Centre and the state governments. Investors easily can open and maintain their government securities accounts online with the RBI, free of cost. No charge will be required for opening an account, maintaining to submitting bids in the primary auctions by the aggregator. But fee requires in payment gateway etc., as applicable.
The scheme, leveraging technological advancement, offers a portal avenue to invest in central government securities, treasury bills, state development loans and Sovereign Gold Bonds (SGBs). The scheme places India in a list of select few countries offering such a facility.
RBI governor Shaktikanta Das, while flagged this initiative in a February policy review, called it a “Major Structural Reforms”.
The central bank said in July that investors will have access to biding in primary auctions as well its trading platforms for government securities called Negotiated Dealing System -Order Matching Segment (NDS-OM).
But don’t Retail investors already invest in government security
Small investors can invest indirectly in g-sec by buying mutual funds or through certain policies issued by life insurance firms.
To encourage direct investment, the government and RBI have taken several steps in recent years.
Retail investors are allowed to place non-competitive bids on auctions of government bonds through their Demat accounts.
Stock exchanges act as aggregators and facilitators of retail bids.
Reserve Bank-Integrated Ombudsman Scheme
The Reserve Bank-Integrated Ombudsman Scheme (RB-IOS) is aimed at further improving the grievance redress mechanism for resolving customer complaints against entities regulated by the central bank.
The central theme of the scheme is based on ‘One Nation-One Ombudsman’ with one portal, one email and one address for the customers to lodge their complaints.
The complaint portal under an Ombudsman Scheme link here Reserve Bank Of India (rbi.org.in).
There will be a single point of reference for customers to file their complaints, submit the documents, track status and provide feedback.
A multi-lingual toll-free number will provide all relevant information or grievance and assistance for filing complaints.
Was there no such facility before?
The central bank’s alternative grievance redress mechanism currently comprises three ombudsman schemes—
The Banking Ombudsman Scheme (BOS), launched in 1995.
The Ombudsman Scheme for Non-Banking Financial companies (OS-NBFC), 2018.
The Ombudsman Scheme for Digital Transactions (OSDT), 2019.
The RBI, after review, decided to integrate the three ombudsman schemes into one and also simplified the scheme. By covering all complaints involving deficiency in service by centralising the receipt and initial processing of complaints to enhance efficiency.
RB-IOS will do away with the jurisdictional limitation as well as limited grounds for complaints. The complaints that, are not covered under the Ombudsman scheme will continue to be attended to by the Customer Education and Protection Cells (CEPCs) located in RBI’s 30 regional offices.,