The Nabard Capital Gains Bonds (CGB), which was issued on September 28, 2001, has so far managed to mobilise more than Rs 3,100 crore from around 38,000 investors all over the country.
Disclosing this, National Bank for Agriculture & Rural Development Bank (Nabard) chief general manager Sukhbir Singh said that his bank is hoping to cross the Rs 3,200-crore mark before the issue closes on Friday (February 22).
The network of 30 regional and sub-offices of Nabard spread across the country with its head office in Mumbai has been utilised to tap the potential nationwide, he added.
The total investments in the CGB issue from Gujarat is around Rs 113 crore, out of which Rs 16 crore has been mobilised by some selective branches of UTI Bank and HDFC Bank, which have been roped in to provide for greater reach among the investor community.
The maximum investments of around Rs 1,200 crore has come from Mumbai followed by New Delhi, Kolkata, Chennai and Bangalore, Singh elaborated.
The Nabard CGB is an instrument meant to save on tax liable on long-term capital gains. The bonds have a face value of Rs 10,000 and there is no upper limit on the amount invested.
The issue is open to individuals, HUFs, OCBs, NRIs, FIIs, partnership firms, AOPs, trusts, societies, co-operative societies and others. Full and firm allotment is given for the entire amount invested.
With a tenure of five years and a "put and call" option at the end of three years, the bonds give the investor an option to either redeem the investment at the end of the third year or to continue the investment for a period of five years.
The interest of 7.5 per cent per annum is calculated annually and payment is offered on either annual or cumulative basis, depending upon the choice of the investor.
The rate of interest prevailing on the day of application remains applicable for the entire tenure of the investment. The yield on the cumulative option for three years translates into 8.08 per cent per annum and 8.71 per cent per annum for five years.
Considering the capital gains tax exemption, the actual yield in the three year and five year options works out to 14.88 per cent and 12.79 per cent, respectively, Singh elaborated.
