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Government re-issues UTI Bonds at 6.2%

Bonds for notified amount of Rs 328 crore

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Our Economy Bureau New Delhi
Last Updated : Feb 06 2013 | 6:19 PM IST
The finance ministry re-issued the UTI Bonds 2010, offering 6.2 per cent returns to the UTI for meeting its liabilities arising on account of the shortfall in the assured return schemes which are being foreclosed.
 
A release issued by the ministry said the bonds would be for a notified amount of Rs 328 crore and would be transferable.
 
The bonds will also be eligible for market repo transactions, but will not be eligible for underlying securities for the Reserve Bank of India's repo transactions.
 
Investors under the schemes will have the options of either opting for the bond or redeem the same in cash.
 
The bonds are part of the government's commitment to the Specified Undertaking of UTI to meet the redemption pressure on account of the maturity of several guaranteed return schemes of the erstwhile UTI.
 
To ensure that the current schemes of the UTI-II did not suffer from the overhang of the past schemes, including the US-64 scheme, the Centre had ring fenced the schemes to be terminated with the Specified Undertaking of UTI, while UTI-II was allowed to run as a mutual fund as per the Sebi regulations.
 
In addition, as per a Cabinet decision taken in 2003, it was decided that the finance ministry would meet any shortfall faced by the Specified Undertaking of UTI in meeting its redemptions under the schemes.
 
During the current fiscal, the Centre has provided Rs 3,500 crore to the UTI to meet its obligations under the assured return schemes, against a budgetary provision of Rs 6,000 crore.

 
 

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First Published: Mar 25 2004 | 12:00 AM IST

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