The Hindu Business Line : Nabard zero coupon bonds

Nabard plans to raise Rs 10,000 crore through issue of 10-year zero coupon bonds. A press release from Nabard said the funds would be used for investment in areas such as agriculture and rural development. The bonds will be issued at a discount and repaid at face value. The face value per bond will be Rs 20,000. The bonds will be listed on Bombay Stock Exchange and investors will have option to sell the bonds in the secondary market. The income accrued on the bonds, i.e. the difference between maturity value and the amount of investment, will be treated as a capital gain and will be taxed accordingly, said the release. No tax will be deducted at source. The bonds will be available for subscription at all offices of Nabard and select bank branches.

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