RBI to launch first tranche of CPI-indexed bonds by Dec end

New Delhi: The Reserve Bank today said itwill launch CPI-indexed bonds aimed at protecting the savingsof retail investors from the impact of price rise by the endof next month.

“Guidelines will be out soon…We are likely to launchthe first tranche before end of December. We will come out with details (quantum),” RBI Deputy Governor H R Khan said onthe sidelines of a National Housing Bank event.

“This year it should be between Rs 10,000-15,000 crore(wholesale price and consumer price indexed bonds) but exactamount will come out. This is part of overall borrowingprogramme,” he said.

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The RBI in its policy statement last month had saidinflation-indexed securities for retail investors of 10-yeartenor would be linked to the new (combined) consumer priceindex.

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Interest would be compounded half-yearly and paidcumulatively at redemption, according to the statement.Inflation-indexed bonds were designed to offer investorsan option to guard their savings against price rises anddissuade them from buying gold. The bonds are part of thegovernment’s borrowing programme.

The government had announced plans to issue Rs12,000-15,000 crore of inflation-indexed bonds with 10-yearmaturity in tranches during the current financial year.While the first series of bonds was open to allcategories of investors, the second series will be exclusivelyfor retail investors.

PTI