The final guidelines for inflation-indexed bonds are likely to be ready in a month’s time, RBI Deputy Governor H. R. Khan has said.
This means there has been a further delay to the earlier indicated timeline of mid-May for announcement of the features for the proposed bonds.
“We are at an advanced stage of discussion with the Finance Ministry. It will be finalised in a month”, Khan told reporters on the sidelines of a Confederation of Indian Industry event on Indian Financial Markets here on Saturday.
This meeting was held as part of the ongoing 46th Annual Meeting of the Board of Governors of the Asian Development Bank.
Retail window
Khan also said that the central bank plans to allow retail participation in inflation indexed bonds. The bonds are likely to be made available under the window provided for auction of government securities.
The only difference is, it will form part of the allocation for non-competitive bidding. RBI may increase the allocation to 10 per cent under the non-competitive window to accommodate retail investors, it is learnt.
The bonds will be linked to the wholesale price index and indexation will happen every six months. The maturity period is likely to be in the range of 7-15 years.
Earlier, speaking at the event, Economic Affairs Secretary Arvind Mayaram said that the Government would continue to work towards deepening and broadening the Indian capital markets. “We will improve their competitiveness in terms of lower cost of doing business and their completeness by expanding the range of instruments offered.”