The revised operational guidelines for the Floating Rate Savings Bonds, 2020 (Taxable) have been issued by the Reserve Bank of India under the provisions of the Government Securities Act, 2006. These guidelines replace the earlier framework issued in June 2020 and aim to enhance efficiency, transparency, and investor protection in the issuance and servicing of these bonds.
The bonds are issued by the Government of India through authorized Receiving Offices (ROs), including select commercial banks and other entities approved by RBI. Investments are maintained in electronic form through a Bond Ledger Account (BLA), ensuring secure and efficient record-keeping. Investors can apply through physical or online modes, with payments accepted via cash (up to ₹20,000), cheque, demand draft, or electronic channels. Permanent Account Number (PAN) is mandatory, subject to specified exceptions, and KYC norms must be followed.
Upon realization of funds, bonds are credited to the investor’s BLA, and a Certificate of Holding (CoH) is issued within three working days. Each investor can maintain only one BLA per RO, with subsequent investments consolidated in the same account. ROs are required to ensure timely remittance of funds to RBI’s Central Accounts Section and accurate reporting, failing which penalties and recovery of interest may apply.
The interest rate is floating, linked to the National Savings Certificate (NSC) rate with an additional spread of 35 basis points. The rate is reset semi-annually, and interest is paid every six months. Tax is deducted at source unless valid exemption documents are provided, and any delay in interest payment requires compensation to the investor.
The bonds have a maturity period of seven years, with no interest payable beyond maturity. Premature encashment is permitted subject to eligibility conditions, primarily based on age criteria, while partial withdrawals are not allowed for a single investment. On maturity, proceeds are credited directly to the investor’s registered bank account.
The guidelines also provide detailed procedures for nomination, including registration, cancellation, and changes. In the event of the investor’s death, bonds are transferred to nominees or legal heirs as per applicable legal provisions. Additionally, ROs must ensure proper handling of claims, reporting, audit compliance, and reconciliation of accounts.
Investor service remains a key focus, with provisions for online access, grievance redressal, and timely processing of requests. Non-compliance with the guidelines may attract penalties and compensation obligations, reinforcing accountability and safeguarding investor interests.
