 "RBI to launch inflation indexed national savings securities-cumulative for retail investors")
“These securities are being launched in the backdrop of announcement made in the Union Budget 2013-14 to introduce instruments that will protect savings from inflation, especially the savings of the poor and middle classes,” said RBI on Friday.
The distribution/sale of IINSS-C would be through banks. According to RBI interest rate on these securities would be linked to final combined Consumer Price Index [CPI (Base: 2010=100)]. “Interest rate would comprise two parts - fixed rate (1.5%) and inflation rate based on CPI and the same will be compounded in the principal on half-yearly basis and paid at the time of maturity,” said RBI.
Early redemptions will be allowed after one year from the date of issue for senior citizens (i.e. above 65 years of age) and 3 years for all others, subject to penalty charges at the rate of 50% of the last coupon payable for early redemption. Early redemptions, however, will be made only on coupon dates, said RBI.