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Monetary policy: Retail interest in G-secs may be limited, say experts

HNI participation may be gradual; mutual funds see little impact on fund flows

monetary policy committee | Reserve Bank of India | G-Secs

Abhijit Lele & Ashley Coutinho  |  Mumbai 

The Reserve Bank of India’s (RBI’s) move to allow direct retail investor participation in government bonds is likely to attract more interest from high net-worth individuals. Also, enhancing retail interest is going to be long-drawn-out affair.

Nor is it expected to hit the flow of money into bank deposits and mutual funds, ruling out a substitution effect, said bankers. Small savings instruments, though illiquid, yield better returns than government securities and hence only high net-worth individuals may be interested in them, said Karthik Srinivasan, group head, ...

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First Published: Sat, February 06 2021. 01:15 IST