Screen-based trading in gilts for small investors soon: Sinha

The government will soon introduce screen-based retail trading system for government securities in a bid to provide a window to small investors for long-term investments and deepening the debt market, Finance Minister Yashwant Sinha said on Friday.

"We are opening the market for government securities. You (retail investors) can trade in gilts through a screen-based trading system," Sinha said in a post-Budget interview.

He said the government was planning to introduce dated securities with longer 15-20 years maturity period.

Sinha also said the gilts would carry almost equivalent rates of return as it was offered by bonds.

To a query whether the government proposed to create long-term instruments for small savings with higher interest rate in line with former Finance Minister P Chadambaram's suggestions, Sinha said gilts with 15-20 years maturity are already there and when the market is opened up, it will be available for small investors as well.

"You don't have to create a separate instrument," he added.

A six-year small savings scheme will carry the same returns as it was for the government securities traded in the market, with the benchmarking of the interest rates, Sinha said.

Gilts are currently traded through the Negotiated Dealing System through setting up of a separate Clearing Corporation of India.

The finance minister said the screen based trading would be started within this year after the passage of the necessary legislations.

PTI

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