P Chidambaram Targets Government For Discontinuing RBI Bonds Scheme
Palaniappan Chidambaram, India’s former finance minister, pauses during a session of the World Economic Forum in Davos, Switzerland. (Photographer: Jason Alden/Bloomberg)

P Chidambaram Targets Government For Discontinuing RBI Bonds Scheme

Bookmark

Senior Congress leader P Chidambaram on Thursday hit out at the government for discontinuing the RBI Bonds scheme, saying it is another "cruel blow" to the citizens.

He said the government has dealt another blow to the citizens who save, especially senior citizens, as it has discontinued the 7.75% RBI Bonds.

Deploring the government action, he urged people to demand from the government that the RBI Bonds be restored immediately.

"After lowering the interest rates in PPF and small savings instruments, the abolition of the RBI Bond is another cruel blow," he said on Twitter.

"All citizens must demand that the RBI Bond must be restored immediately," the former finance minister said.

Chidambaram said the government did this once before in January 2018.

"I protested vehemently. Next day they re-introduced the bond but reduced the interest rate from 8% to 7.75%," he noted.

He said effectively, after tax, the bond will yield only 4.4%. "That is now taken away. Why? I deplore this action," he said.

Also read: RBI Credit Line To Act As ‘Insurance’ For Exim Bank

He said every government is bound to provide at least one safe risk-free investment option to its citizens and "it was the RBI bond since 2003".

The government discontinued the 7.75% Savings (Taxable) Bonds scheme, 2018, by issuing a notification that said that they shall cease for subscription with effect from the close of banking business on May 28.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.