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‘Not closing GOI Savings Bonds, just replacing it’

Author: Team Finapolis/Tuesday, January 2, 2018/Categories: Bonds

‘Not closing GOI Savings Bonds, just replacing it’

Hyderabad: After facing huge criticism from the Opposition, the government clarified on January 2 that it was not closing the GOI Savings Bonds, 2003, earning 8% interest per annum but replacing it with a scheme earning 7.75% interest.

“8% Savings Bonds Scheme, also known as RBI Bonds Scheme, is not being closed. 8% Scheme is being replaced by 7.75% Savings Bonds Scheme,” Subhash Chandra Garg, secretary to the department of economic affairs, ministry of finance, tweeted on Tuesday morning.

On Monday, January 1, the government had announced that its GOI Savings Bonds, 2003, will cease subscription from the next day.

The bonds have been popular on account of offering a higher rate of interest than small savings and fixed deposit rates.

Following the announcement, Congress leader and former Union finance minister P Chidambaram criticised the government for scrapping a taxable bond, calling it a “deplorable act”.

“Modi government scraps 8% taxable bonds dealing a severe blow to the middle class. How will the risk-averse average citizen save?” Chidambaram said in a tweet.

“Government owes a duty to provide its citizens one safe and risk free instrument for savings. Taking the only instrument away is a deplorable act," he added.

GOI Savings Bonds, 2003, with a tenure of 6 years and a minimum investment of Rs 1,000, were available in physical form only and not listed or tradable on stock exchanges.

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Kavita Giridhar Mallya

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