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The Reserve Bank of India (RBI) today extended the time for issuance of inflation indexed bonds to March 31, 2014 from earlier date of Dec 31, 2013.
The RBI in consultation with 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,” the RBI said in a release.
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 Consumer Price Index (CPI). 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 date of issue for senior citizens (65 years and above of age) and 3 years for all others, subject to penalty charges at the rate of 50 per cent of the last coupon payable for early redemption.
These securities will be issued in the form of Bonds Ledger Account (BLA). The securities in the form of BLA will be issued and held with RBI and thus RBI will act as central depository.
As distribution or sale of bonds would be through banks, the Ministry said investors may approach branches of State Bank of India and its associate banks and all nationalised banks.
Eligible investors can also buy bonds from three private sector banks — HDFC Bank, ICICI Bank and Axis Bank — and Stock Holding Corporation of India.
These bonds are launched as instruments that will protect savings from inflation, especially the savings of the poor and middle classes.
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