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Sunday, Dec 15, 2002

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No loans against 7% savings bonds

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MUMBAI, Dec. 14

BANKS are not allowed to sanction loans against the 7 per cent savings bonds 2002 scheme, which was introduced in October this year, according to a statement from the Reserve Bank of India.

In a press release, the RBI has said that this facility can be availed only against the Relief Bonds only. The 7 per cent savings bonds 2002 are not eligible as collateral for loans from banks and financial institutions and non-banking financial institutions.

Unlike the 8 per cent relief bond 2002, there is no upper limit for investments in 7 per cent savings bonds. Income tax and wealth tax exemptions are, however, available to interest earned on both the bonds, the RBI has said.

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