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What is GOI Bonds ?

A government bond is a debt instrument issued by the Central and State Governments of India. Issuance of such bonds occur when the issuing body (Central or State governments) faces a liquidity crisis and requires funds for the purpose of infrastructure development.

Floating Rate Savings Bonds 2020 (Taxable)

Government of India has decided to launch Floating Rate Savings Bonds 2020 (Taxable) scheme, with effect from July 01, 2020 in terms of GOI Notification F.No.4(10)- B(W&M)/2020 dated June 26, 2020. The terms and conditions of the issuance of the Bonds shall be as per the above GOI Notification.
A copy of the Circular, Government Notification and Press Release with regard to this Scheme has been placed on RBI website. The salient features of the Bond are detailed below.

1. Eligibility for Investment: The Bonds may be held by:

(i) A Person Resident in India

(ii) A Hindu Undivided Family

2. Subscription

Subscription to the bonds will be in the form of cash (upto `20,000/- only)/drafts/cheques or any electronic mode acceptable to the Receiving Office.

3. Form of the Bonds

The Bonds will be issued only in the electronic form and held at the credit of the holder in an account called Bond Ledger Account (BLA), opened with the Receiving Office.

4. Receiving Offices

Any number of branches of State Bank of India, Nationalised Banks and four private sector banks, as specified in the Annexure 3 of the GoI Notification F.No.4(10)-B(W&M)/2020.

5. Nomination

Nomination and its cancellation shall be in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulation, 2007, published in Part III, Section 4 of the Gazette of India dated December 1, 2007.

6. Transferability

The Bonds held to the credit of Bond Ledger Account (BLA) of an investor shall not be transferable, except transfer to a nominee(s)/legal heir in case of death of the holder of the bonds.

7. Interest (Floating)

(i) Option

The interest on the bonds will be payable at half yearly intervals on Jan 1st and July 1st every year. There is no option to pay interest on cumulative basis.

(ii) Rate

The coupon/interest of the bond would be reset half yearly starting with Jan 1st, 2021 and thereafter every July 1st and Jan 1st. The coupon rate for first coupon period, payable on January 1, 2021 is fixed at 7.15%.

(iii) Base Rate

The coupon rate will be linked/pegged with prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.
All other terms and conditions specified in the notification of Government of India issued by the Ministry of Finance (Department of Economic Affairs) vide Notification F.No.4(2)-W&M/2018 dated March 27, 2018 shall apply to the Bonds.
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