NSE goBID – How a retail investor can buy G-Secs on this Platform?
On Monday, NSE has launched a new mobile app and desktop platform NSE goBID that would enable Retail investors to invest in Government Securities in India. Currently Retail investors are participating very low in Government Securities. 10 year yield of Government securities is currently ranging between 7.8% to 7.83%, hence such platform would definitely attract investors in India. What is an NSE goBID Mobile App or Platform? How new retail investors can register on NSE goBID? Who can access NSE goBID Platform to invest in G-Secs? How to place Bids and get payments on the NSE goBID Platform?
What is an NSE goBID Mobile App or Platform?
As a part of the overall strategy of the Government to diversify the investor base of Government securities, the GOI and RBI have introduced various measures to encourage the participation of retail investors in the government security market. One such example is the introduction of non-competitive bidding in primary auctions. With the same motive goes the step of introduction of online mobile application.
On Monday, November 19, 2018 Ajay Tyagi, the Chairman, SEBI launched the new mobile application and web-based platform in the name of NSE goBID in order to provide facility to the investors to buy the government securities online.
Who can register or access this NSE goBID Mobile App / Platform?
The application is available to all the registered investors with NSE trading members and also facilitates members to acquire new retail investors. The app will allow the investors to make the payments directly from their bank accounts using the UPI (Unified Payments Interface) and internet banking.
How new retail investors can register on NSE goBID?
If you are new retail investor of NSE, you can register at this link.
Step 1: Register – Provide basic details (PAN & Demat Account), Select Trading Member
Step 2: Place Bid – Select T-Bill/Bond available for subscription, Make Online Payment from Bank Account Linked to Demat Account
Step 3: Get Bonds – Directly in Demat Account, Refund if any in Bank Account
What we can do with NSE goBID Mobile App / Platform?
This platform will allow retail investors to invest in treasury bills (T-bills) of different time horizons like 91 days, 182 days and 364 days and also various government bonds ranging from 1 year to 40 years. Investment can be done almost every week after one-time registration. You can visit this NSE link for new registrations.
Currently, the government bonds are providing better yields than the returns from bank fixed deposits, but the retail investors were unable to avail those returns. The 10-year government bond yield is trading at 7.80%-7.83%. So far, the participation of retail investors in the government securities has been low. With the launch of this application, now the retail participation would escalate manifolds. It was at the time where the entire country is witnessing a surge in digital payments.
How a retail investor can buy G-Secs on this NSE goBID Platform?
Here are the various steps in bidding G-sec’s on the GoBID Platform of NSE.
1) GoBID Platform, shall display a list of securities currently available along with relevant bidding details and price payable
2) For placing a bid, investors should select only one security at a time and specify the investment amount in terms of face value. (Min Rs.10, 000 and multiples thereof, subject to the maximum limit specified)
3) Only single bid per security is permitted
4) On submission of a bid, the total amount payable shall be displayed
5) Investors can now proceed to pay online using internet banking or UPI. Investors shall be permitted to make payment using only the bank account linked to the demat account as provided by Depositories
6) Securities will be credited to investors demat account and refund if any will be credited to the investor’s bank account as per the timelines specified by the Exchange/Clearing Corporation from time to time
7) Payment status, Mismatch status, Bid status, Refund (if any) shall be made available on the platform
8) In case of cancellation, refund shall be processed by the payment gateway
9) In case, of any dispute or difference of opinion with trading member, NSE shall provide necessary and suitable administrative support for the speedy Redressal of the dispute.
What is the use of this NSE goBID App or Platform?
The RBI conducts weekly auctions of government securities and treasury bills. Bidding in the auction is done through competitive and non-competitive bidding. Non-competitive bidding was introduced for facilitation of retail investor participation in government securities and treasury bills. It enables small and medium investors participate in the auction process without taking the price risk in auctions. It means that a person can participate in the auctions of dated government securities without having quoted the yield or price in the bid. 5% of the notified amount is allotted to the eligible investors under the scheme.
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Through this application, the investors can place order for buying T-bills and GOI (Government of India) dated bonds in the primary market. The platform will offer a ready infrastructure to Trading Members of NSE for order collection, payments, refunds, transfer of bonds. However, Trading Members may offer their own facility for collecting orders from their investors.
While retail investors will seek to benefit from a convenient payment option, its cost effectiveness will allure trading members of the NSE as the cost associated with setting-up infrastructure is much lower than the existing platform.
Conclusion: Investments in government securities are one of the much safer and credit risk-free option available to retail investors, which also provides a diversification in the investment portfolio. But, the investors were unable to participate in it with full vigor. With the introduction of this app, the investment in the corporate bond market is now a few clicks away.
This article is prepared with limited information available now. It would be updated as soon as we get more information on how this platform runs exactly.
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NSE goBID – How a retail investor can buy G-Secs on this Platform