RBI's Retail Direct Scheme could disrupt the market, pose a significant challenge to market intermediaries

Level Playing Field: By providing direct access to retail investors, the RBI's app creates a more level playing field in the G-sec market.

Brand Trust: The RBI’s direct involvement in providing access to the G-sec market through a mobile app may instill greater confidence among retail investors.

Regulatory Oversight: As a regulator, the RBI ensures compliance with regulatory requirements and safeguards investor interests. Retail investors may feel more secure using the RBI's app knowing that it operates within a regulated framework.

Cost Competitiveness: If the RBI's app offers lower transaction costs or zero cost compared to other market intermediaries who offers same products, it could attract retail investors looking to maximise their returns.

Integrated Platform: The RBI's app may offer a seamless and integrated platform for investing in G-secs, providing a one-stop solution for retail investors' needs. This could include features such as account management, investment tracking, direct credit of interest and principal to customers bank account and online customer support.

Innovation and Technology: The RBI's foray into the mobile app space demonstrates its commitment to innovation and leveraging technology to enhance financial inclusion. Retail investors may be drawn to the convenience and accessibility offered by the app, especially if it incorporates user-friendly features and interfaces.

Also read: Retail investors shy away from G-sec secondary market on lack of awareness

Overall, the RBI's announcement of a mobile app for accessing the Retail Direct Scheme to participate in the G-sec market has the potential to revolutionise the retail segment by providing greater accessibility, transparency, and cost-effectiveness. It also poses a significant competitive challenge to market intermediaries, forcing them to adapt their offerings to remain competitive in the evolving landscape of retail investment.

(The writer is Managing Partner of Rockfort Fincap LLP and a veteran of bond markets with over three decades of experience.)