New Delhi: National Stock Exchange of India (NSE) has launched "e - Gsec", a new platform for promoting the non-competitive bidding in Government of India Dated Securities (G-Sec) and Treasury Bills (T-Bills).
e - Gsec will permit retail investors to spend in Government Securities and keep them in existing demat accounts.
The non-competitive bidding facility was launched by the Reserve Bank of India (RBI) to boost retail participation in the primary market for Government Securities. In an extension of this effort, the Union Budget 2016-17 had declared, inter-alia, that RBI will facilitate retail participation in the primary markets through stock exchanges.
The RBI administers 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 plan for non-competitive bidding facility.
The launch of NSE's e - Gsec platform gives investors with a chance to participate in the G-Sec auction of April 26, 2018, and the following 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.