Sale of inflation-linked bonds to open on Monday
21 Dec 2013
The issue of Inflation Indexed National Savings Securities-Cumulative (IINSS-C) that will protect savings from price rise will open for subscription by retail investors on 23 December and close on 31 December, the finance ministry and the Reserve Bank of India stated in separate releases on Friday.
The minimum limit for investment is Rs5,000 and the maximum is Rs5,00,000 per applicant per year.
Individuals, Hindu undivided families, charitable institutions and universities are eligible for subscription.
Interest rate on these securities would be linked to final combined consumer price index (CPI having base: 2010=100). Interest rate would comprise two parts, ie, fixed rate (1.5 per cent per annum) and inflation rate based on CPI and the same will be compounded in the principal on half-yearly basis and paid at the time of maturity. The final combined CPI will be used with a lag of three months, ie, final combined CPI for September 2013 will be used as reference CPI for all days of December 2013.
Early redemptions will be allowed after one year from the date of issue for senior citizens (ie, 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. Early redemptions, however, can be made only on coupon dates.
The sale and distribution of IINSS-C would be through banks and eligible investors may approach the branches of State Bank of India or its associate banks, nationalised banks and three private sector banks - HDFC Bank Ltd, ICICI Bank Ltd and Axis Bank Ltd as also the Stock Holding Corporation of India Ltd during working hours, the release said, adding that the subscription may be closed earlier than 31 December 2013 with prior notice.
It may be recalled that the Reserve Bank of India, in consultation with Government of India, announced issuance of the Inflation Indexed National Savings Securities-Cumulative (IINSS-C) for retail investors on 29 November 2013.
