Bank branches and post offices could be used as distribution channels to get retail investors to invest in government securities, according to a Reserve Bank of India panel.
Further, investment in government securities (G-Secs) will become attractive for retail investors if the interest rates offered on various small savings instruments are aligned with the rates yields of G-Secs of comparable tenors.
As retail investors currently have to pay large illiquidity premium when they try to sell illiquid securities, the panel said this issue could be addressed by involving primary dealers (PDs) in the market-making mechanism.
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