The government on Wednesday introduced Inflation Indexed Bonds (IIBs) in a bid to curb India’s appetite for gold.
The first tranche will be introduced on June 4 and will be for Rs 1,000- Rs 2,000 crore.
The IIBs will initially have a maturity period of 10 years and the total issuance for 2013-14 would be Rs 12,000- Rs 15,000 crore, the Ministry of Finance said in a statement. After the first tranche, bonds will be issued on the last Tuesday of every month.
“Pursuant to the announcement in the Union Budget 2013-14, the Government of India in consultation with Reserve Bank of India (RBI) has decided to launch Inflation Indexed Bonds as instruments that will protect the savings of poor and middle classes from inflation and incentivise household sector to save in financial instruments rather than buy gold,” the Finance Ministry statement read.
While the first series of bonds will be open for all class of investors, the second series issue — beginning October — will be exclusively for retail investors.