Introduction of New Floating Rate Saving Bonds 2020

Published on June 29, 2020
Current Context: The Government of India has introduced new Floating Rate Saving Bonds (FRSB), which is a taxable scheme in place of 7.75% Saving (Taxable ) Bonds 2018.
Introduction of New Floating Rate Saving Bonds 2020
  • The new introduction FRSB will be in effect from 1st July 2020.
  • The initial 7.75% saving (Taxable) Bonds 2018 were ceased for subscription from the close of banking business recently.
  • The FRSB Scheme is going to issue a floating rate, taxable saving bonds for an initial coupon of 7.15% payable on 1st Jan 2021.
  • These bonds will be issued by Reserve Bank of India on behalf of Government of India.
  • The FRSB scheme will work as an inflation hedge by saving the government from higher cost when rates are low.
  • The minimum amount for this scheme will be Rs 1000 with no maximum limit. And the interest on these bonds will be payable semi-annually i.e. on 1st Jan and 1st July every year. The tenure for the bonds is 7 years.

Question: 

Q.1 What is the minimum amount to be issued for Floating Rate Saving Bonds Taxable Scheme?
a. Rs 500
b. Rs 1000
c. Rs 100
d. Rs 5000

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