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In a smart radial distribution grid (RDS), distributed generators (DGs) will be more prominent. The addition of the DGs changes the topology of RDS, causes bidirectional power flows and contributes to fault current levels. This may result in unwanted tripping of existing overcurrent (OC) protection devices and in permanent outage of a large number of customers. The increased penetration of DGs requires a smarter protection that considers all the network flows while optimizing the system assets. This paper presents an approach that modified an existing overcurrent protection scheme to reduce the number of customers' affected by faults in RDS with DGs. The modified approach involves predefining protection zones in RDS and installing directional OC relays and circuit breakers at the zonal boundaries. Zonal boundary relays determine faulted zones by sharing information on the direction of their detected fault current using binary bit signals over a radio frequency communication medium. The approach was verified through simulations using EMTP™/PSCAD®. Results from simulations showed the selective identification and isolation of faulted zones while allowing some of the DGs to continue to supply the unfaulted parts of the system.