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Below is perspective on RBI Retail Direct Scheme By Mr. Nitin Shanbhag, Sr. Executive group VP- Motilal Oswal Private Wealth.

“The G-sec market is dominated by Institutional investors like Banks, Insurance companies, Mutual Funds, etc. with lot sizes of Rs. 5 crores & higher. Hence this segment was largely inaccessible to retail participants. G-secs witnesses highest volumes within the fixed income market since they offer a risk-free rate, hence no credit risk. Retail investors could thus far participate in G-secs only through Debt Mutual Funds, although with limited options. Further, in Debt funds, investors have to invest with a minimum 3 year investment horizon through the Growth option to qualify for long term capital gains @20% with indexation benefit. The RBI Retail Direct Scheme will enable retail investors to participate into G-secs across various tenors with flexible investment horizons and with the ability to get regular cash flows through risk-free coupons.”

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