Retail Direct could be a direct loss.

"Prime Minister Narendra Modi...in a virtual meet launched the 'RBI Retail Direct Scheme'. The scheme allows retail investors to buy and sell government bonds online," ET. "It is the first time in India when retail investors will have an option of simple and direct channel for investment in government securities. The government securities offer a low risk and low return on the investment in equity and asset." Investing in government bonds is not for ordinary investors because there are other schemes which offer safety with higher interest and tax benefits, BS. These bonds are not completely free of risk. "The interest rate risk assumes significance particularly at a time when interest rates are expected to harden. The yields on government bonds have already started hardening. Yields and bond prices are inversely related," DH. "When bond yields rise and prices fall, investors have to book mark-to-marker loss." Why trap unwary people in an investment which offer low interest, have no tax benefits and may fall in price? Because if lots of people bid for the bonds the prices will rise and lower borrowing costs for the government. A cunning wheeze. Already 32,000 people have registered on the site, maybe without considering that "In a rising interest rate scenario, investors are likely to incur mark-to-market losses if they sell it before scheduled maturity," TN. The RBI has held interest rate at 4% since 22 May 2020 despite higher consumer price index (CPI) inflation, HT. In line with that, the RBI has been buying long term securities, to drive up prices by deliberately creating a shortage, while selling short term ones in Open Market Operations (OMOs), known as Operation Twist, HT. In April, the RBI announced purchase of government securities worth Rs 1 trillion under a new Government Securities Acquisition Programme (G-SAP), somewhat like quantitative easing (QE) but intended to drive bond yields lower, BL. The government borrows money from the market through the RBI which auctions bonds. Till March, the RBI refused to sell bonds on five occasions because traders demanded a higher rate of return than the RBI was willing to offer, ET. The bonds devolved on the under-writers. In July, the RBI offered bonds worth Rs 140 billion at a coupon rate of 6.10% but traders demanded 6.15% and again the RBI chose not to sell, BS. However, retail investors will not be allowed to quote a price when they put in a bid to buy these bonds. "By placing a bid in the primary auctions of dated G-Sec (bonds), T-Bills and SDLs (Non-competitive segment only, i.e., by only entering the desired amount of securities, without entering a price)," CNBC. So retail investors will be forced to buy bonds without knowing the rate of return. In theory, the RBI could sell to retail investors at a coupon rate of 4%, or lower, and these bonds will have no value in the secondary market. Dud bonds or daylight robbery. By our own Reserve Bank and government.