 "RBI extends deadline to issue inflation-indexed bonds to Mar 31")
The Reserve Bank of India (RBI) has extended the time for issuing inflation-indexed bonds by three months to March 31, 2014, from December 31, 2013.
RBI, in consultation with the government, earlier this month launched Inflation Indexed National Saving Securities- Cumulative (IINSS-C) that were open for subscription between December 23-31. “On review, now it has been decided to extend the issuance of Inflation Indexed National Saving Securities-Cumulative till March 31, 2014. The issuance can be closed earlier than March 31, 2014, with a prior notice,” RBI said in a release.
Bankers said the operational guidelines (internal to banks) for hawking these certificates at the branch level are still in the works. Even after they are ready, much of the time will have to be spent in increasing customer awareness.
The minimum limit for investment is Rs 5,000 and the maximum limit is Rs 5 lakh per applicant per annum. Individuals, Hindu Undivided Family, charitable institutions and universities are eligible for subscription.
Interest rate would be linked to the Consumer Price Index (CPI). The rate would comprise two parts — fixed rate (1.5 per cent per annum) and inflation rate based on CPI. The same will be compounded in the principal on half-yearly basis and paid at the time of maturity.
Early redemptions, to be allowed only on coupon dates, will be allowed after one year from the date of issue for senior citizens (65 years and above of age) and three years for all others, subject to penalty charges at the rate of 50 per cent of the last coupon payable for early redemption.
RBI, in consultation with the government, earlier this month launched Inflation Indexed National Saving Securities- Cumulative (IINSS-C) that were open for subscription between December 23-31. “On review, now it has been decided to extend the issuance of Inflation Indexed National Saving Securities-Cumulative till March 31, 2014. The issuance can be closed earlier than March 31, 2014, with a prior notice,” RBI said in a release.
Bankers said the operational guidelines (internal to banks) for hawking these certificates at the branch level are still in the works. Even after they are ready, much of the time will have to be spent in increasing customer awareness.
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“It is unrealistic to expect an enthusiastic response to the bonds early,” said a senior public sector banker.
The minimum limit for investment is Rs 5,000 and the maximum limit is Rs 5 lakh per applicant per annum. Individuals, Hindu Undivided Family, charitable institutions and universities are eligible for subscription.
Interest rate would be linked to the Consumer Price Index (CPI). The rate would comprise two parts — fixed rate (1.5 per cent per annum) and inflation rate based on CPI. The same will be compounded in the principal on half-yearly basis and paid at the time of maturity.
Early redemptions, to be allowed only on coupon dates, will be allowed after one year from the date of issue for senior citizens (65 years and above of age) and three years for all others, subject to penalty charges at the rate of 50 per cent of the last coupon payable for early redemption.