The Centre has issued special floating rate bonds worth Rs 7,000 crore to the postal department.
These bonds have been issued at par as part conversion of the frozen corpus of Post Office Life Insurance Fund and Rural Post Life Insurance Fund.
Any investment in the special floating rate bond by banks and insurance companies will not be reckoned as an eligible investment in government bonds for their statutory requirements.
However, such investment by insurance companies will be eligible to be reckoned as investment under other “approved bonds’’ category as defined under the Insurance Regulatory and Development Authority (investment) Regulations 2000.
Further, investment by provident funds, gratuity funds and superannuation funds in the special bonds will be treated as an eligible investment under the administrative order of the Finance Ministry.