The demand for government securities is now driven more by considerations of effective management of liquidity rather than by statutory liquidity requirements. Efforts are being made to improve the retail holding of government securities since the Government securities market still lacks in depth and is dominated by banks and financial institutions often exhibiting uni-directional perceptions about liquidity.
To attract retail participation in government securities market, one of the foremost tasks ahead is to create an environment that provides a safe and secure investment avenue for small investors with adequate returns and liquidity.