Reserve Bank of India onboards the Penny Drop Bank Account Validation wagon

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Reserve Bank of India onboards the Penny Drop Bank Account Validation wagon

            Reserve Bank of India’s FAQs for Reserve Bank of India - 'Retail Detail Scheme' Point 8 (h) mentions the below: -

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The savings bank account of the customer will be linked to their Retail Direct account by crediting a token amount into their bank account and verifying the same.

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The complete FAQs on Retail Deposit Scheme can be accessed @ https://rbi.org.in/Scripts/FAQView.aspx?Id=145

Reserve Bank of India’s Retail Direct Scheme is a one-stop solution to facilitate investment in Government Securities by individual investors.

Under this scheme individual retail investors can open a Gilt Securities Account – “Retail Direct Gilt (RDG)” account with RBI.

Using this account, retail investors can buy and sell government securities through the online portal – https://rbiretaildirect.org.in

The RDG requires an underlying bank account for the fund’s movement. Hence, each RDG account is to be linked to a bank account.

Over the years, Penny Drop or INR One Rupee (INR 1) in the Indian context is the most preferred way to verify the receiver's bank account.

Under the ‘Penny Drop’ process, the response file comes back with the validated bank details along with the beneficiary name.

This is a wonderful investor-friendly step by the Reserve Bank of India

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18. Why do I need to provide my bank account details?

The funds will be settled through this rupee savings bank account in case of any purchase/sale. Periodic coupon payments and redemption amount of the invested security will also be credited to this bank account.

19. How can I link my bank account with my Retail Direct Gilt (RDG) account?

To link your bank account, you can either upload a picture of your bank account’s cancelled cheque from where the system will automatically read the required details or enter the bank account details yourself. The system will then transfer a token amount to your account. Confirming this token amount on the next screen will lead to automatic verification and linking.

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