In order to encourage higher participation from retail investors, Bombay Stock Exchange (BSE) will be offering incentive schemes to trading members in the non-competitive bidding of government securities (G-Sec) and treasury bills (T-bills). It will come into effect from 19 November.
Initially, the scheme would be launched for six months and will be based on total value collected and the number of unique clients introduced by trading members in a month.
To collect bids from retail investors, BSE launched non-competitive bidding in G-sec and T-bills from 24 April after seeking necessary approvals from SEBI and RBI. T-bills and G-Sec are instruments that can be traded on stock exchanges. These are issued by the government to raise money in order to manage short-term liquidity. These are safe to invest in as they are backed by the RBI.
T-bills are usually issued every week and the exact date of auction is announced by RBI with the amount to be auctioned and payment dates. They are issued at a discount and redeemable at par, which leaves the interest to the investors. It is mainly bought by provident funds and banks that purchase these T-bills due to a requirement to hold government securities.