The Reserve Bank of India (RBI) will approach the government to get tax benefits for retail investments in sovereign securities under the Retail Direct Scheme (RDS) which will take India into an elite club of nations having ownership of government debt.
Experts believe it can attract global fintech companies like BondEvalue. The company ran the world’s first fractional bond exchange and entered India after RBI launched the programme. “We will soon be starting our first office in India in Mumbai. We see massive demand from NRIs globally to invest in India. Using our digital platform, we want to allow every person’s money to be invested in government securities and government-linked securities,” Rahul Banerjee, CEO of BondEvalue, said.
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Bonds haven’t been as successful as equities in attracting retail investors. But, countries like Japan have funded their development using domestic retail bond markets. The United States and Brazil have also put in dedicated efforts. Fixed-income products in India like small savings schemes or debt mutual funds offer better returns with similar tax structures.