Financial Daily from THE HINDU group of publications
Sunday, Aug 25, 2002
Financial Daily from THE HINDU group of publications Sunday, Aug 25, 2002 |
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Agri-Biz & Commodities
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Agricultural Institutions Corporate - Corporate Bonds Nabard to issue tax-free bonds Poornima Mohandas
MUMBAI, Aug. 24 THE National Agriculture Bank for Rural Development (Nabard) will be issuing tax-free bonds for Rs 1,000 crore. This will be for the first time that the bank is coming out with tax-free bonds. Earlier, it had come out with capital gains bonds. According to senior Nabard officials, the terms and conditions of the tax-free bonds are being worked out. The maturity of the tax-free bond is likely to be five years and will not have a put and call option, unlike capital gains bonds. "The rate of interest which is still not been fixed, is to be comparable with the capital gains bond which currently offers an interest rate of seven per cent,'' said a senior official in Nabard. The RBI relief bond comes at an interest rate of eight per cent. According to the officials, the bank plans to market the new bond aggressively though its branches. The funds from this issue will be used to meet this financial year's target of Rs 8,000 crore credit through the refinancing route. The capital gains bond, an on tap, has been open in the market since September 2000 and has till-date generated funds close to Rs 3,720 crore.
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