Context:

Reserve Bank has allowed retail investors to directly buy government debt, also called “gilt bonds”, making India the first Asian country to do so.

G-Secs

• G-Secs are traceable investment instruments issued by the Central or state governments and are the most risk-free sovereign-backed bonds available in the country.
• They can broadly be classified into four categories, namely Treasury Bills (T-bills), Cash Management Bills (CMBs), dated G-Secs, and State Development Loans (SDLs).
• These securities are available in both short-term and long-term tenures — ranging from three months to 30 years — with an annual yield starting from 3.37 percent.

Significance of the move

• It is proposed to provide retail investors with online access to the government securities market — both primary and secondary — directly through the Reserve Bank (Retail Direct).
• This will broaden the investor base and provide retail investors with enhanced access to participate in the government securities market.

Gilt bonds

G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.