On Thursday, Former Finance Minister P Chidambaram said that the government’s action to discontinue the RBI bonds scheme is another “cruel blow” towards the citizens. He stated that the withdrawal of the bonds by 7.75 percent is another setback for people who save. Moreover, it is remarkably unfair towards senior citizens.
“Every government is bound to provide at least one safe, risk-free investment option to its citizens. It was the RBI bond since 2003,” he said in a Tweet.
Moreover, he urged people to demand from the government to re-establish the RBI bonds. “After lowering the interest rates in PPF and small savings instruments, the abolition of the RBI Bond is another cruel blow,” he added.
He mentioned that the government took the same step in January 2018. However, he condemned the action to which the government re-introduced the bond but declined the interest rate from 8 to 7.75 percent.
Government has dealt another blow to citizens who save, especially senior citizens. It has discontinued the 7.75 per cent RBI Bonds.
— P. Chidambaram (@PChidambaram_IN) May 28, 2020
“Effectively, after-tax, the bond will yield only 4.4 percent. That is now taken away. Why? I deplore this action,” he added.
The Reserve Bank of India informed that the government has decided to pull out the 7.75 percent Savings (Taxable) Bonds scheme after the banking business close on Thursday owing to the drop in the Interest rates.
“Government of India has vide Notification F.No.4(28)-(W&M)/2017 dated May 27, 2020, announced that the 7.75 percent Savings (Taxable) Bonds, 2018 shall cease for subscription with effect from the close of business on Thursday, the 28th of May, 2020,” RBI stated in its notification on Wednesday.
Moreover, it also advised the receiving offices to take note of the development and inform its branches.
