What is CSGL Account?
CSGL accounts are a demat form of holding government securities with the RBI, just as an investor can hold shares in demat form with a depository participant. Government Securities are largely issued as Stocks and held in demat form to the credit of the holder in the Subsidiary General Ledger account (SGL) maintained in the books of RBI. When these securities are held by the investor through an agent like PD or Bank the agent holds another SGL account with…
GSecs for Retail Investors
Retailing the G-Secs means taking the G-Secs market to retail investors. Today, the G-Secs market in the country is predominantly inhabited by wholesale players like Banks, Financial Institutions, Primary Dealers, FIIs, Mutual Funds, Insurance Companies, Brokers, Pension Funds, etc. For vibrant G-Secs market, it is necessary to attract retail investors so that they can participate in the market that will bring them a reasonable return with no credit risk. Recently, with the introduction of Government Securities Act, 2006 and the Government…
Primary Dealers for Government Securities in India
The system of Primary Dealers (PDs) in the Government Securities Market was introduced by Reserve Bank of India in 1995 to strengthen the market infrastructure of Government Securities and put in place an improved, efficient secondary market trading system. This was to encourage holding of Government Securities on large scale and make the market more vibrant and liquid. In 2006-07, RBI gave Banks the option to undertake Primary Dealership business departmentally. DFHI was set up by RBI along with public…
What are Gilt Funds in India?
Gilt Funds Gilt funds, as they are conveniently called, are mutual fund schemes floated by asset management companies (AMCs) with exclusive investments in government securities. The schemes are also referred to as mutual funds dedicated exclusively to investments in government securities. Government securities mean and include central government dated securities, state government securities and treasury bills. The gilt funds provide to the investors the safety of investments made in government securities and better returns than direct investments in these securities…
Why invest in GSecs in India?
2. Why should one invest in Government securities? Holding of cash in excess of the day-to-day needs of a bank does not give any return to it. Investment in gold has attendant problems in regard to appraising its purity, valuation, safe custody, etc. Investing in Government securities has the following advantages: Besides providing a return in the form of coupons (interest), Government securities offer the maximum safety as they carry the Sovereign’s commitment for payment of interest and repayment of…
Government Securities (GSecs), India
1. What is a Government Security? A Government security is a tradable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation. Such securities are short term (usually called treasury bills, with original maturities of less than one year) or long term (usually called Government bonds or dated securities with original maturity of one year or more). In India, the Central Government issues both, treasury bills and bonds or dated securities while the State…