The Reserve Bank of India (RBI) will launch inflation-indexed bonds (IIBs), beginning June 4, aimed at attracting household savings of up to Rs.
15,000 crore during 2013-14 and dissuade people from locking up their surplus money in assets such as
“Pursuant to the announcement in the Union Budget 2013-14, the government in consultation with the RBI has decided to launch inflation IIBs, as instruments that will protect savings of poor and middle classes from inflation and incentivise household sector to save in financial instruments rather than buy gold,” the finance ministry said in a statement issued on Wednesday.
The first tranche of the IIBs-2013-14 for Rs. 1,000-2,000 crore will be issued on June 4, the finance ministry said, adding, the maturity period of these bonds will be 10 years. The total issue size will be Rs. 12,000-15,000 crore in 2013-14.
After the first tranche, bonds will be issued on last Tuesday of every month.
Both the government as well as the RBI are concerned over rising gold imports as its putting pressure on current account deficit, which widened to a historic high of 6.7% in the third quarter of 2012-13.
Gold and silver imports last month shot up 138%, year-on-year, to $7.5 billion.
Announcement of the bonds to discourage investments in gold is the second major move by the central bank in the last three days.
On Monday, the RBI had placed restrictions on banks to import gold.
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