Retail investors could soon find it easier to buy and sell government securities, with the Reserve Bank of India (RBI) proposing a series of measures to simplify access to the government bond market through its draft Master Direction on Secondary Market Transactions in Government Securities, 2026.

The draft framework, released for public comments, seeks to consolidate multiple regulations while expanding digital access to the Negotiated Dealing System-Order Matching (NDS-OM) platform, the RBI's electronic trading system for government securities. 

Multiple access routes for retail investors

One of the biggest takeaways from the draft is the expansion of access channels for individual investors.

Under the proposal, individuals can participate in the secondary market through the RBI Retail Direct Scheme, demat accounts maintained with eligible depository participant banks, or demat accounts held with SEBI-registered depositories using the Stock Broker Connect facility. 

The draft also clarifies that individual investors maintaining demat accounts through depository participant banks that are direct members of NDS-OM can execute transactions directly on the platform. This significantly broadens access to government securities beyond institutional investors. 

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Mandatory web-based trading access

The RBI has also proposed that direct members of NDS-OM provide web-based access to their constituent gilt account holders.

For individual gilt account holders and demat account holders, direct members that also function as depository participant banks must provide access to the NDS-OM web module upon request. The proposal is aimed at reducing dependence on intermediaries and enabling investors to transact digitally with greater ease. 

Minimum investment remains affordable

The draft retains a relatively low entry threshold for investors.

Government securities can be traded for a minimum face value of ₹10,000, with transactions thereafter permitted in multiples of ₹10,000 unless specified otherwise by the RBI. Transactions may be executed either on a price basis or a yield basis during market hours from 9:00 am to 5:00 pm on Mumbai working days. 

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More transparency in the bond market

The proposed directions also seek to improve transparency and operational efficiency.

Over-the-counter (OTC) transactions that are not executed on NDS-OM must be reported within 15 minutes of execution. In addition, all government securities transactions would continue to settle on a T+1 basis through a Delivery versus Payment (DvP) mechanism, reducing settlement risk and ensuring simultaneous transfer of securities and funds. 

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A simplified regulatory framework

Beyond improving investor access, the RBI is proposing to consolidate numerous circulars governing secondary market transactions, "When Issued" trading and short-selling into a single Master Direction.

The move is expected to simplify compliance for market participants while creating a more consistent regulatory framework for India's government securities market. 

The draft reflects the RBI's continued push to deepen the retail bond market, an objective it has pursued through initiatives such as the Retail Direct Scheme and broader access to NDS-OM. If finalised, the proposed framework could make investing in sovereign bonds more convenient for individual investors while improving transparency and efficiency across the government securities market.

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Published on: Jun 26, 2026 9:15 AM IST