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<ul><li><keyword id="122724" type="General" weightage="20" keywordseo="government-securities" source="Orion">Government securities</keyword> are considered among the safest investment options due to the sovereign guarantee attached to them. </li><li>Most brokers allow trading of existing <keyword id="6371629" type="General" weightage="20" keywordseo="g-secs" source="Orion">G-secs</keyword> on the secondary market through their platforms.</li><li>Investing in G-sec-focused mutual funds allows a diversified portfolio within Government securities and low-ticket investments. </li></ul>Government securities, commonly known as G-secs, are <keyword id="166233" type="General" weightage="20" keywordseo="debt-instruments" source="Orion">debt instruments</keyword> issued by the Government of India to raise capital. These securities serve as a way for the government to borrow money from the public or institutions. G-secs come with fixed <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword> and predetermined maturity dates. They are considered among the safest investment options due to the sovereign guarantee attached to them, ensuring repayment of the principal amount and interest upon maturity. The credit risk on G-secs is thus minimal. Government bonds also boast high liquidity and can be traded easily in the secondary market. This flexibility provides an opportunity to earn improved returns on the bonds and allows for exiting at any desired time before the maturity date as well. How G-secs work Investing in g-secs involves purchasing these bonds at face value, and the interest, also known as the coupon, is paid periodically, typically semi-annually or annually, until the maturity date. The interest rates on g-secs are influenced by various factors, including market demand, inflation, and the monetary policy of the Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>). Consequently, the prices of G-secs fluctuate inversely with the prevailing interest rates in the market. When interest rates rise, the value of existing G-secs falls, and vice versa. These securities are traded in the primary and secondary markets. In the primary market, they are directly issued by the government through auctions, while in the secondary market, they are bought and sold among investors. How to invest G-secs are available in various tenures, ranging from short-term (Treasury bills) to long-term (Government bonds). The Retail Direct Scheme by the Reserve Bank of India (RBI) rolled out in 2021 enables individual investors to directly invest in government securities without requiring intermediaries such as brokers or mutual funds. The NSE goBID platform allows retail investors to participate in auctions for new G-sec issuances through your broker. It offers a non-competitive bidding process, meaning you specify your desired amount, and if your bid is accepted, you'll get allotted securities at the cut-off price. Most brokers allow trading of existing G-secs on the secondary market through their platforms. This offers flexibility to choose specific securities and exit positions when needed. Steps to invest `Here are the steps to invest in G-secs. <ol><li>Log in to your brokerage account </li><li>Navigate to the bids section: Locate and click on the "Bids" tab or section within the platform.</li><li>Select government securities: Once in the Bids section, find and select the option for "Govt. securities."</li><li>Initiate the bid: Look for the option to "Place bid" and click on it.</li><li>Enter bid Amount: Input the specific amount you wish to bid for the government securities.</li><li>Finalise the bid: After entering the amount, confirm the bid by clicking on the "Place bid" button.</li></ol>Investing in G-secs through the mutual fund route One can also take the mutual funds route to invest in G-secs. “Investing in G-sec focused mutual funds allows a diversified portfolio within Government securities and low ticket investments,” says Marzban Irani, chief investment officer, fixed income, LIC Mutual Fund. This can be suitable for passive investors or those seeking exposure without actively managing individual bonds. “It is always easy for investors to buy subscription or redemption requests in a mutual fund, compared to looking out to buy or sell securities in the fixed income market. Also, one may buy and hold but in between prices can fluctuate. Many people may not understand the drivers of those price fluctuations,” says Pankaj Pathak, fund manager, fixed income, Quantum AMC. Interest rate risks G-secs do carry one particular risk, that of interest rate fluctuations in the broader market. When rates rise, existing G-Secs with lower rates lose value compared to newer securities offering higher rates. Conversely, falling rates increase demand for older G-Secs, potentially raising their value. Longer-term G-Secs are more prone to rate change risks than short-term ones. Investors holding G-Secs until maturity aren't affected by price fluctuations but can lose potential earnings if rates rise after purchase. “A sudden increase in interest rate can impact return. So one is advised to invest into G Secs only for long-term goals,” says Abhishek Kumar, founder and chief<a href="https://business.outlookindia.com/invest/investment"> </a>investment advisor at SahajMoney, a financial planning firm. Is this a good time to invest? Government securities (G-Secs) typically attract conservative investors seeking a steady income from their investments. Moreover, investors often include G-Secs in their portfolio's debt allocation, which comprises diverse assets like equities, fixed-income instruments, and safe havens such as gold. At present, we are at the peak of the interest rate hike cycle. Developed economies like the US are expecting rate cuts going ahead in 2024. On the domestic front, the core inflation seems to be under control. “The interest rates are holding steady and might even start going down from the second half of next year,” says Kumar. So, going forward, retail investors can expect to improve their returns on G Sec investments. Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

A case for investing in Government securities

The Reserve Bank on Friday announced the launch of a mobile app to enable <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword> to participate in government securities (<keyword id="21202837" type="General" weightage="20" keywordseo="G-Secs" source="keywords">G-Secs</keyword>) or <keyword id="20283766" type="General" weightage="20" keywordseo="government-bonds" source="keywords">government bonds</keyword> market. <keyword id="21202838" type="General" weightage="20" keywordseo="rbi-retail-direct-scheme" source="keywords">RBI Retail Direct Scheme</keyword>, launched in November 2021, gives access to individual investors to maintain gilt accounts with the <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> and invest in government securities. The Scheme enables investors to buy securities in primary auctions as well as buy/sell securities through the <keyword id="382785" type="General" weightage="20" keywordseo="Negotiated-Dealing-System" source="Orion">Negotiated Dealing System</keyword> - <keyword id="21202839" type="General" weightage="20" keywordseo="Order-Matching-system" source="Orion">Order Matching system</keyword> (NDS-OM) platform. "To further improve ease of access, a mobile application of the Retail Direct portal is being developed. The app will enable investors to buy and sell instruments on the go, at their convenience. The app will be available for use shortly," RBI Governor <keyword id="19913110" type="General" weightage="20" keywordseo="shaktikanta-das" source="keywords">Shaktikanta Das</keyword> said, while announcing the first bi-monthly monetary policy for the current fiscal. The government is planning for gross market borrowing of Rs 14.13 lakh crore for 2024-25. Out of this Rs 7.5 lakh crore, or 53 per cent, is scheduled to be borrowed in the first half (H1). In a separate announcement, RBI permitted non-bank payment system operators to offer Central Bank Digital Currency (CBDC) wallets to encourage its wider use. Currently, CBDC pilots in the retail and wholesale segments are underway with more use-cases and more participating banks. "Continuing with this approach, it is proposed to make CBDC-Retail accessible to a broader segment of users in a sustained manner, by enabling non-bank payment system operators to offer CBDC wallets," he said. This is expected to enhance access and expand choices available to users apart from testing the resiliency of the CBDC platform to handle multi-channel transactions, he said, adding, necessary changes will be made to the system to facilitate this. In November 2022, the pilot of the wholesale CBDC, known as the Digital Rupee-Wholesale (e-W), was launched with the use case being limited to the settlement of secondary market transactions in government securities. In the following month, RBI rolled out a pilot in the retail version of the CBDC (e-R).

RBI to soon launch app to enable retail investors to participate in govt bonds

Mumbai, Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> on Thursday said the <keyword id="50847" type="General" weightage="50" keywordseo="reserve-bank" source="Orion">Reserve Bank</keyword> is not "unduly concerned" about the Russian investments in Indian government bonds. Without sharing the details of the trade surplus invested by Russian entities in government securities (G-secs), Das underlined that trade relations between the two countries are for the long term and there is no reason to fear a pullout of the money. In May this year, the Indian Banks Association had said that <keyword id="6358826" type="General" weightage="20" keywordseo="russia" source="Orion">Russia</keyword> is investing the surplus it earns out of oil sales to India in G-secs, but the market's estimates on the quantum vary from USD 10-22 billion. "Its not something about which we are really unduly concerned. We are not concerned unduly because market has its estimates. So far as we are concerned, it is not going to cause any (impact)," Das told reporters at the post-policy press meet here. He added that India is "far better placed" with forex reserves of over USD 600 billion to deal with any situation. Deputy Governor T Rabi Sankar said it will not be proper for the <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> to speak specifically about the amounts invested by a country or a particular entity, but added that such investments are allowed through the foreign portfolio investor or vostro account route. "It may not be accurate to think that the trade surplus is staying in the country. Because a large part of that is oil. Oil, up to the global cap can be paid through the normal channels. It is getting paid, most of it is getting paid, some of it could be remaining as rupee balances in SRVA accounts. Don't include the trade balance of USD 40 billion or something to the amount that must remain within the country," Sankar added. Das also said that after the war between Russia and Ukraine broke out last year, there were fears of a depreciation in the rupee but the same did not turn out to be true because of RBI's market interventions. "...none of that happened because the RBI was there in the market. And RBI is always there in the market," Das said, adding that the RBI is confident of dealing with any situation if at all it arises.

RBI not 'unduly concerned' about Russian investments in G-secs, says Das

<keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) on Wednesday said it is putting in place a secondary market <keyword id="122724" type="ORGANIZATION" weightage="20" keywordseo="government-securities">government securities</keyword> acquisition programme or G-SAP 1.0 for this financial to enable an orderly evolution of the yield curve. RBI said the endeavour through the programme will be to ensure congenial financial conditions for the recovery to gain traction. Under the programme, which will be for 2021-22, RBI will commit "upfront to a specific amount of open market purchases of government securities with a view to enabling a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions," Governor Shaktikanta Das said while announcing the monetary policy. For the first quarter of the financial year 2021-22, RBI will conduct a G-SAP of Rs 1 lakh crore, and the first purchase of government securities for an aggregate amount of Rs 25,000 crore will be conducted on April 15, Das said. The benchmark 10-year bond, which traded at 5.93 per cent (on an average) during April 2020-January 2021, spiked to 6.25 per cent on March 10, 2021 before coming down again. In sync with <keyword id="6375573" type="COMPANY" weightage="20" keywordseo="G-sec">G-Sec</keyword> yields, corporate bond yields also hardened across issuers and rating categories in the recent period. During the post policy conference, Das told reporters that G-SAP is different from the regular <keyword id="475574" type="COMPANY" weightage="20" keywordseo="open-market-operations">Open Market Operations</keyword> (OMOs) that RBI conducts. "It has a distinct character, in the sense that for the first time we are giving out a particular quantum of bond purchase in the secondary market. Within this particular quarter, we will be suitably depending on the evolving situation and will be announcing auctions from time to time," he said. Deputy Governor Michael <keyword id="49966" type="COMPANY" weightage="20" keywordseo="Patra">Patra</keyword> said that with this, RBI, for the first time, is committing its balance sheet to the conduct of monetary policy. "When we are unchanged on the policy rate, we need an instrument to run monetary policy. In the past, all our actions were to move the interest rates up and down and ensure that proper transmission happens across the market spectrum. This time we are being more explicit. "We are not waiting for the indirect channel of interest rates and prices to operate. We are directly committing an expansion in our balance sheet of a certain specified amount which is known to the public with the hope of ensuring orderly conditions in the market," Patra added. Giving up an amount upfront also helps market participants to plan their engagement with the borrowing programme, he noted. G-SAP will run alongside RBI's regular operations including Liquidity Adjustment Facility (LAF), OMOs and operation twist, Patra said, adding that the programme is built into the central bank's liquidity planning framework for 2021-22 as a whole. Das said the positive externalities of G-SAP 1.0 operations need to be seen in the context of those segments of the financial markets that rely on the G-Sec yield curve as a pricing benchmark. When asked whether RBI will announce the amount every quarter under G-SAP, the Governor said it is not a one-off kind of thing and the effort will be to continue with G-SAP. The central bank also announced that it will conduct 14-day Variable Rate Reverse Repo (VRRR) auctions of longer maturity as indicated in the Revised Liquidity Management Framework announced on February 6, 2020. The amount and tenor of these auctions will be decided based on the evolving liquidity and financial conditions, RBI said. "This is a part of RBI's liquidity management operations and should not be read as liquidity tightening. In fact, by paying a higher rate of interest on liquidity absorptions through the VRRR auctions, the RBI is indirectly expanding liquidity," Das emphasised. While laying out the liquidity management strategy for 2021-22, Das said RBI's endeavour is to ensure orderly evolution of the yield curve, governed by fundamentals as distinct from any specific level thereof. "Our objective is to eschew volatility in the G-Sec market in view of its central role in the pricing of other financial market instruments across the term structure and issuers, both in the public and private sectors," he said. This is a necessary pre-requisite for the nascent and hesitant recovery to firm up and become durable. Das also urged market participants to pay heed to RBI's actions, communication and signals in a balanced manner. "Together, we can overcome the challenges and lay the foundations for a durable recovery beyond the pandemic. Let us prepare for our tryst with our potential firmly," he added. Further, RBI extended on-tap targeted Long Term Repo Operations (<keyword id="2636226" type="COMPANY" weightage="20" keywordseo="TLTRO">TLTRO</keyword>) by six months to September 30. The scheme was announced in October last year and was available till March 31, 2021. To ensure continued flow of credit to the real economy, RBI also extended fresh support of Rs 50,000 crore to All India Financial Institutions (AIFIs) for new lending in the current financial year. Accordingly, Rs 25,000 crore will be provided to NABARD; Rs 10,000 crore to National Housing Bank (NHB) and Rs 15,000 crore to Small Industries Development Bank of India (SIDBI). Further, the timeline for banks to on-lend through non-banking finance companies has been extended by six months to September 30.

RBI initiates G-SAP 1.0 to keep the balance between yield curves and liquidity

Mumbai, May 22 ( The government has announced to sell dated securities worth Rs 30,000 crore on May 29, the Reserve Bank of India (RBI) said in a statement on Friday. The auction is part of government's market borrowing programme. Earlier this month, the government had decided to modify the indicative calendar for issuance of government dated securities for the remaining part of the first half of the fiscal 2020-21 (May 11-September 30, 2020) after reviewing its cash position and requirements. The estimated gross market borrowing in the financial year 2020-21 will be Rs 12 lakh crore in place of Rs 7.80 lakh crore as per Budget Estimate (2020-21). The revision in borrowings was necessitated on account of the COVID-19 pandemic. As per the RBI, the securities being offered for auction on May 29 are: 6.18 per cent GS 2024 (Rs 12,000 crore), New GS 2034 (Rs 11,000 crore) and 7.16 per cent GS 2050 (Rs 7,000 crore). The notified amount for the three securities total Rs 30,000 crore. The Government of India will have the "option to retain additional subscription up to Rs 2,000 crore" each against any one or more of the securities, it added. The RBI said the auction will be yield based for new security and price based for other securities, using multiple price method. Up to 5 per cent of the notified amount of the sale of the stocks will be allotted to eligible individuals and institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities. Both competitive and non-competitive bids for the auction should be submitted in electronic format on the RBI Core Banking Solution (E-Kuber) system on May 29, 2020, the central bank added. NKD MKJ MKJ

RBI to auction G-secs worth Rs 30,000 cr next Friday

By Kumar Dipankar &amp; Ammar Zaidi New Delhi, Feb 21 () Reserve Bank of India Governor Shaktikanta Das has said the central bank has already initiated discussions with some institutions and efforts are on for inclusion of government bonds in global indices as quickly as possible. The development would attract higher foreign flows as many overseas funds are mandated to track global indices. It will help bring in large passive investments from overseas, as a result more domestic capital would be available for industry as crowding out to that extent would be reduced. "That is work in progress. We have had our discussions with some institutions which maintain these global index...not possible to spell out a timeline, but it is a work in progress. Our effort will be to see that it is taken forward as quickly as possible. I don't want to give a timeline," he told in an interview. This was a long-pending suggestion of foreign investors that was addressed in the Budget this year. "Certain specified categories of Government securities would be opened fully for non-resident investors, apart from being available to domestic investors as well," Finance Minister Nirmala Sitharaman had said in the Budget 2020-21. The specified securities, which will be listed on the indices, will not have a lock-in requirement. Globally, there are some large institutional investors that track these indices, such as Bloomberg Barclays Emerging Market Bond index, for positional decisions on sovereign papers. With regard to health of the shadow banking sector, Governor Das said RBI has been monitoring the top 50 NBFCs very closely, in fact much more closely than anybody can imagine from outside. "Similarly, the health of the other financial sector entities including the banks are also being very closely monitored by the Reserve Bank of India. The Reserve Bank remains committed to maintain financial sector stability," he said. As far as the NBFCs are concerned, he said, "our close monitoring over the last one year, we have a reasonably good idea about where exactly the stress lies. We are constantly engaged with the individual NBFCs and only very few of the NBFCs have some liquidity issues." "We are constantly engaging with their management, with their promoters and encouraging them to resolve their problems through market based solutions in terms of getting additional liquidity. The engagement with the NBFCs management is constantly on," he added. Sounding sanguine about the future, Das said the overall flow of credit to the NBFC sector has improved quite steadily over the last few months. "There are a good number of NBFCs which are able to access funds from the market at reasonably competent rates, even comparable to or perhaps a bit lower than the pre-IL&amp;FS rates. So, therefore, NBFC sector is slowly improving, and it has steadily improved over the years and we will continue to monitor that sector," he said. The NBFC sector, including some large housing finance companies, came under stress following a series of defaults by Infrastructure Leasing &amp; Financial Services (IL&amp;FS) group companies beginning September 2018. Immediately after the IL&amp;FS crisis, NBFCs faced severe liquidity crunch as mutual funds (MFs) stopped refinancing their loans, leading to asset liability mismatch. The situation became so dire that it was even compared to the 2008 Lehman Brothers crisis. The government had to step in and supersede the board to avert a blow up. Subsequently, RBI pitched to ease liquidity issues. In a bid to improve regulatory oversight, housing finance companies were brought under the RBI from the fold of National Housing Bank. DP ANZ ABM

RBI in discussion with institutions; efforts on to include G-Secs in global indices soon: Das

Mumbai, Apr 23 () The Reserve Bank of India (RBI) will simultaneously purchase and sell government securities worth Rs 10,000 crore each through a special open market operation (OMO) on April 27. In a statement, the central bank said special OMO of simultaneous purchase and sale of government securities (g-sec) will done using the multiple price auction method. "On a review of current and evolving liquidity and market conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of government securities under OMO for Rs 10,000 crores each on April 27, 2020," it said. The RBI further said it reserves the right to decide on the quantum of purchase/sale of individual securities and accept or reject any or all the bids and offers either wholly or partially without assigning any reasons. Eligible participants can submit their bids or offers in electronic format on the RBI Core Banking Solution (E-Kuber) system on Monday. The result of the auctions will be announced on the same day and successful participants. In another release, the RBI has specified the minimum underwriting commitment and minimum bidding commitment for the underwriting auction for sale of g-sec for Rs 21,000 crore scheduled for Friday. The underwriting auction will be conducted through multiple price-based method. NKD HRS

Special OMO: RBI to simultaneously buy, sell g-sec worth Rs 10,000 cr each on Apr 27

Mumbai, Dec 23 () The Reserve Bank on Monday purchased Rs 10,000 crore worth of long-term government securities and sold Rs 6,825 crore of four short-term securities through the special open market operations (OMOs).
Last week, the RBI had announced simultaneous purchase and sale of government securities under OMOs for Rs 10,000 crore each.
In the OMO purchase of 6.45 per cent GS 2029, which is a benchmark security, the RBI received Rs 20,826 crore worth of bids from the participants but accepted Rs 10,000 crore of bids.
"The RBI offered to purchase the 10-year benchmark security which is liquid and highly traded in the secondary market. The outstanding stock of this bond is around Rs
67,447.851 crore. This would have attracted the bidders to buy it through OMO purchase," said a bank treasurer at a state-run bank.
The central bank received 161 bids to purchase 6.45 per cent-2029 bonds whereas it accepted 145 bids. The cut-off yield to accept the bid was 6.546 per cent.
The RBI offered to sell four government securities -- 6.65 per cent GS 2020; 7.80 per cent GS 2020; 8.27 per cent GS 2020 and 8.12 per cent GS 2020 through OMO sale.
It accepted only Rs 6,825 crore worth of bids for the four securities as against Rs 20,330 crore bids it received in the OMO sale auction.
In terms of number of bids, the central bank received 30 bids for 6.65 per cent GS 2020; 26 for 7.80 per cent GS 2020, 13 for 8.27 per cent GS 2020 and 47 for 8.12 per cent GS 2020 but accepted 6, 13, 3 and 13 bids, respectively.
Analysts said the simultaneous sale and purchase of government bonds through OMO auctions were held to correct the yield curve to make it more representative of the current economic condition.
"This operation was done to align the yield curve where we can see too much of steepening now. This kind of steepening is seen in a growing economy with high growth rate, which is not the case here," said a treasury dealer with another state-run bank adding that the auctions will help in rationalise the curve.
Last week, DBS Bank economist, Radhika Rao, in a note said the special OMO auctions, similar to the US Federal Reserves' "Operation Twist" announced in September 2011 and ran through end-2012, is part of broader measures by the RBI to expedite policy transmission.
The Reserve Bank of India has reduced repo rate by 135 basis points between February and October 2019 but there has been a delay in passing on the cut in repo rate by lenders.
In the December policy, the six member monetary policy committee (MPC) unanimously voted for the pause in rates. HV KPM MKJ

RBI purchases Rs 10,000-cr G-Secs, sells Rs 6,825 cr securities via OMOs

The Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) is likely to transfer approximately Rs 1000 billion to the <keyword id="19900449" type="General" weightage="20" keywordseo="government" source="keywords">government</keyword> IN <keyword id="19965933" type="General" weightage="20" keywordseo="FY25" source="keywords">FY25</keyword> according to a report by Union Bank of India. The report highlights that RBI is anticipated to maintain a robust <keyword id="20047030" type="General" weightage="20" keywordseo="dividend" source="keywords">dividend</keyword> payout for the <keyword id="20093202" type="General" weightage="20" keywordseo="fiscal-year" source="keywords">fiscal year</keyword> 2025 (FY25). This projection represents a slight increase from Rs 874 billion transferred in the previous fiscal year. "The government has budgeted the FY25 dividend for RBI and PSU banks &amp; financial institutions at INR 1020bn, vis-a-vis INR 1044bn in FY24. In our view, a positive surprise is likely, similar to last year when initial budget estimate for overall dividend was only INR 480bn" said the report. Analysts in the report predict a potential positive surprise, akin to the previous fiscal year, when the initial budget estimate for dividends was significantly lower at INR 480 billion. Despite several factors influencing RBI's dividend calculation, such as <keyword id="21195402" type="General" weightage="20" keywordseo="interest-earnings" source="keywords">interest earnings</keyword> and foreign exchange (FX) gains, analysts predict a continuation of strong dividend figures. The majority of RBI's balance sheet, approximately 70 percent, consists of foreign currency assets, with another 20 per cent in domestic government bonds. Interest earnings from these securities are expected to range from Rs 1.5-1.7 trillion. Additionally, interest from liquidity operations has increased RBI's earnings, particularly as the banking system returned to a deficit mode from September 2023. While income gains of RBI from FX (Forex) sales decreased slightly due to lower sales volumes, they are expected to remain substantial despite a rise in the weighted average cost of <keyword id="20102143" type="General" weightage="20" keywordseo="reserves" source="keywords">reserves</keyword>. Moreover, a decline in provisions likely contributed to boosting RBI's dividend. Provisions for reserves, as per the Economic Capital Framework outlined by the Jalan committee, saw a rise in the contingency fund provision due to increased balance sheet growth. The impact of the RBI dividend announcement on markets may be limited in the near term, especially with ongoing elections potentially delaying government spending. However, if the surplus balance is utilized for activities like G-Sec buybacks, it could support the shorter end of the G-Sec curve. Overall, analysts maintain a positive outlook on longer-duration G-Secs due to favorable demand-supply dynamics. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/indian-smartphone-market-up-8-5g-smartphones-account-for-over-70-of-shipments/articleshow/110002512.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/indian-smartphone-market-up-8-5g-smartphones-account-for-over-70-of-shipments/articleshow/110002512.cms" target="_blank">Indian smartphone market up 8%, 5G smartphones account for over 70% of shipments</a><a href="https://www.businessinsider.in/sports/webstories/ipl-decoded-highest-individual-scores-in-ipl-2024-so-far-from-stoinis-to-kohli/slidelist/110008351.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/webstories/ipl-decoded-highest-individual-scores-in-ipl-2024-so-far-from-stoinis-to-kohli/slidelist/110008351.cms" target="_blank">IPL Decoded: Highest individual scores in IPL 2024 so far, from Stoinis to Kohli</a><a href="https://www.businessinsider.in/tech/mobile/news/apple-and-samsung-dominate-the-top-selling-smartphones-in-q1-2024/slidelist/109977094.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/apple-and-samsung-dominate-the-top-selling-smartphones-in-q1-2024/slidelist/109977094.cms" target="_blank">Apple and Samsung dominate the top-selling smartphones in Q1 2024</a>

RBI likely to transfer ₹1 trillion to government in FY25

<ul><li>Reserve Bank of India governor Shaktikanta Das today announced that users will soon be able to deposit cash using <keyword id="6358921" type="General" weightage="20" keywordseo="upi" source="Orion">UPI</keyword> at ATMs.</li><li>Users will also be able to make UPI payments via PPI wallets through third-party apps.</li><li>The governor-led MPC also proposed the launch of a dedicated mobile app for retail investors to access the G-sec market.</li></ul>Forgot to carry your debit card while visiting the ATM? Don’t worry, the Reserve Bank of India (RBI) understands your pain. On Friday, RBI governor Shaktikanta Das announced that bank account holders will soon be able to deposit money at ATMs using UPI, or Unified Payments Interface. Earlier, in January, RBI had announced that it would allow users to withdraw cash from ATMs using UPI. At the moment, cash deposits at ATMs can be done via two methods – using debit cards and manually entering the savings account number. Das announced RBI’s latest Monetary Policy Committee (MPC) meeting, where the central bank left the key repo rate unchanged. <cmsannotation type="cmsannotation" annotationid="Enhancing UPI features" comment="subhead" text="Enhancing UPI features">Enhancing UPI features</cmsannotation> Thanks to UPI’s widespread use, RBI has been expanding its features to include various options from setting autopay instructions for bill payments to creating mandates for IPO applications and more. After the previous MPC meet in January, RBI governor announced that cash withdrawals would be made possible through UPI ATMs. “This measure will further enhance customer convenience and make the currency handling process at banks more efficient,” said Das. In addition to this, RBI also announced that it will allow the use of third-party UPI apps for making UPI payments via prepaid payment instrument (PPI) wallets, like Paytm and GooglePay. With today’s announcement, the central bank looks keen on slowly but steadily replacing debit cards with UPI. <a href="https://www.businessinsider.in/business/news/size-does-matter-debit-cards-for-large-payments-upi-for-smaller-ones/articleshow/109002682.cms">Recent reports suggest that</a>, while UPI usage is growing exponentially, people continue to use Debit Cards, especially for large payments. <cmsannotation type="cmsannotation" annotationid="New app for G-sec market" comment="subhead" text="New app for G-sec market">New app for G-sec market</cmsannotation> RBI’s aim with this is to make it more convenient to use digital payments for small-value transactions. Lastly, the MPC also proposed the launch of a dedicated mobile app to access the Retail Direct portal. Das believes this will enhance convenience to retail investors and improve the reach of the government securities (G-sec) market. RBI launched the Retail Direct scheme in 2021 to make it possible for retail and individual investors to participate in the government securities market. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/markets/news/markets-trade-flat-after-rbi-mpc-leaves-repo-rate-unchanged-at-6-5/articleshow/109055645.cms">Status quo: Markets trade flat after RBI MPC leaves repo rate unchanged at 6.5%</a> <a href="https://www.businessinsider.in/finance/news/rbis-mpc-keeps-rates-unchanged-to-be-actively-disinflationary/articleshow/109053104.cms">We want the elephant of inflation to walk back to the forest: Shaktikanta Das</a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-add-nearly-5-million-subscribers-in-january-2024/articleshow/109040220.cms">Reliance Jio and Airtel add nearly 5 million subscribers in January 2024</a>

Not just withdraw, you can soon deposit cash using UPI at ATMs, promises RBI

<keyword id="6389755" type="General" weightage="20" keywordseo="foreign-portfolio-investors" source="Orion">Foreign Portfolio Investors</keyword> (FPIs) have infused about Rs 12,400 crore into the Indian debt markets in November so far, making it the highest <keyword id="45422" type="General" weightage="20" keywordseo="inflow" source="Orion">inflow</keyword> in more than two years, on attractive yields offered by the country's debt. The inclusion of Indian G-Sec in the JP Morgan Government Bond Index Emerging Markets has spurred foreign fund participation in the Indian bond markets, market experts said. FPIs have been bullish on Indian debt since the beginning of 2023 and have invested throughout the year, except March, when they had pulled out Rs 2,505 crore, data with the depositories showed. With the latest inflow, the <keyword id="2609447" type="General" weightage="20" keywordseo="net-investment" source="Orion">net investment</keyword> by FPIs into debt reached Rs 47,900 crore so far this calendar year. According to the data, overseas investors put in a net amount of Rs 12,400 crore into the <keyword id="144818" type="General" weightage="20" keywordseo="debt-market" source="Orion">debt market</keyword> this month (till November 27). This was the highest inflow since September 2021, when they had poured Rs 12,804 crore. This came following a net investment of Rs 6,382 crore in October. Indian debt is relatively attractive compared to debt in other emerging markets, and it offers a relatively high <keyword id="6355374" type="General" weightage="20" keywordseo="yield" source="Orion">yield</keyword> compared to debt in developed markets, Bhuvan Rustagi, COO and Co-Founder, of Per Annum and Lendbox, said. Apart from equities, FPIs pumped in a net amount of Rs 378 crore in the equity markets during the period under review. This came after FPIs dumped equities worth Rs 24,548 crore in October and Rs 14,767 crore in September. "The better-than-expected decline in inflation in the US around mid-October has given the market confidence to assume that the Fed is done with a rate hike. Consequently, the US bond yields have declined sharply with the 10-year benchmark bond yield correcting from 5 per cent in mid-October to 4.4 per cent now. This has forced the FPIs to slow down their selling," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said. Overall, the cumulative trend for 2023 remains healthy, with FPIs pouring in Rs 96,340 crore so far this calendar year.

FPIs investment in debt market hits 2-yr high at Rs 12,400 crore in Nov

<ul><li>For an index fund, the expense ratio is almost next to nothing, whereas for actively managed funds it could be as high as 2% </li><li>If you do not have the time or the expertise to study the fund manager or his style, you should consider <keyword id="5294193" type="General" weightage="20" keywordseo="passively-managed-funds" source="Orion">passively managed funds</keyword> </li><li><keyword id="440024" type="General" weightage="20" keywordseo="index-funds" source="Orion">Index funds</keyword> may also benefit savvy investors who want to manage only part of their portfolio actively </li></ul>Interestingly, the first theoretical model for index funds was suggested by a couple of students at the University of Chicago in 1960, but their idea found little support at that time. But as we know, index funds were popularised in the 1970s by John Bogle, the chief executive of the Vanguard Group, who is also known as the father of index funds. Index funds are funds that aim to replicate the performance of a specific <keyword id="35187" type="General" weightage="20" keywordseo="market-index" source="Orion">market index</keyword>, such as the NIFTY 50, Nifty Midcap 150 etc. These funds passively track the composition and performance of the underlying index rather than actively selecting individual stocks. They track respective indices, investing in the same securities in proportions mirroring the index. “These funds offer <keyword id="7082929" type="General" weightage="20" keywordseo="passive-management" source="Orion">passive management</keyword>, low cost, and instant diversification, making them popular among investors seeking exposure to specific market index while minimising costs and risks,” says Pankaj Shrestha, Head, Investment Services, Prabhudas Lilladher. Types of index funds <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Market capitalisation-based Index Funds such as Nifty 50 Index Fund, Sensex Index Fund, Nifty Midcap 150 Index Fund, Nifty Smallcap 250 Index Fund, Global Index Fund – such as Nasdaq 100 Index Fund Sector Index funds such as Nifty Bank Index Fund, Nifty Pharma Index Fund, Nifty Auto Index Fund, Nifty I.T. Smart Beta Index Funds such as Nifty 50 Value 20 Index fund, Nifty 200 Momentum 30 Index fund, Nifty 50 Equal Weight Index Fund Debt Index Funds such as Nifty Gsec, Nifty SDL </td></tr></tbody></table> On the other hand, we have actively managed funds where the fund manager decides what stocks to buy, hold, or sell. Hence, these funds have a higher expense ratio. Actively managed funds have the potential to beat the benchmark, though this may not always be the case. Are index funds for you? In an index fund, you exactly know where the fund manager is investing. In the case of an actively managed fund, you need to know about the fund, and whether the fund manager will be properly following the mandate or not. Therefore, in addition to the fund’s potential and reputation, you need to study the fund manager, their investment philosophy, and track record. This is not the case with an index fund where the style of the fund manager is not a worry. The most significant advantage is the expense ratio. For an index fund, the expense ratio is almost next to nothing, whereas for actively managed funds it could be as high as 2%. “A lot of people say that they invest in gold as a hedge against the equity markets. We can also say that passively managed funds like index funds are some kind of a hedge to actively managed funds style. Within equity, some allocation should always go to a passively managed fund. In the last few months we have seen that many actively managed funds are underperforming the benchmark,” says Hitendra Parekh, Fund Manager, Passive Funds, Quantum AMC. Those who do not have the time or the expertise to study the fund manager or his style should go for a passively managed fund. For this reason, for the beginner investor, passively managed funds are a good way of investing. As we have seen, buying an index fund can also give you exposure to different sectors like financial services, auto, pharma and so on. “Auto for instance is at the cusp of a technology change. We are seeing a proliferation of electric vehicles (EVs) as a technology, which can be a new driver altogether. But if you do not know who will win, the next best thing you can do is to buy the entire index,” says Varadarajan. For this reason, Varadarajan believes that to say that index funds are for beginner investors is an oversimplification. “Index funds can help even the savvy investor. He may want to manage some part of his portfolio very actively wherein he knows the bets he is taking, the company, the management etc. However, if there are opportunities that are coming at a sector level and it is a sunrise sector, and you are betting on a large part of the sector through an index fund, then you will benefit over a period of time without having to worry who will be the winner etc” he says. How much allocation one should have towards index funds would vary from investor to investor. “If there is 70% allocation towards equity, the investor should deploy some 15-20% in passively managed funds,” says Parekh. What to look for when selecting an index fund Before choosing an index fund, one should consider the following factors. Select the proper index: Since now many index funds are available, the first thing is to choose where he wants to invest, whether he wants to track a market capitalisation or sector and so on. Expense ratio: Look for funds with low expense ratios to minimise costs and maximise returns. Tracking Error: “Assess the fund's ability to closely track its benchmark index over time to ensure it effectively mirrors market performance,” says Shresta. Historical Performance: While past performance doesn't guarantee future results, reviewing the fund's historical performance relative to its benchmark can provide insights into its tracking ability and consistency. Even the Oracle of Ohama, Warren Buffet bats for index funds. When investing, sometimes you need to go passive.

You Searched For "gsecs" and got 13 results

A case for investing in Government securities

Anagh Pal

RBI to soon launch app to enable retail investors to participate in govt bonds

PTI

RBI not 'unduly concerned' about Russian investments in G-secs, says Das

PTI

RBI initiates G-SAP 1.0 to keep the balance between yield curves and liquidity

PTI

RBI to auction G-secs worth Rs 30,000 cr next Friday

PTI

RBI in discussion with institutions; efforts on to include G-Secs in global indices soon: Das

PTI

Special OMO: RBI to simultaneously buy, sell g-sec worth Rs 10,000 cr each on Apr 27

PTI

RBI purchases Rs 10,000-cr G-Secs, sells Rs 6,825 cr securities via OMOs

PTI

RBI likely to transfer ₹1 trillion to government in FY25

ANI

Not just withdraw, you can soon deposit cash using UPI at ATMs, promises RBI

Sourabh Jain

FPIs investment in debt market hits 2-yr high at Rs 12,400 crore in Nov

PTI

As markets touch historic highs, index funds continue to offer exciting returns! Should you invest?

Anagh Pal

Debt MFs catch investor fancy as their returns go up to 23%

Bhakti Makwana

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