NABARD's Rs 5k-cr bonds draw poor investor response
Retail investors seem to have totally shunned this investment option even if it qualifies for tax exemption under Section 80C of Income Tax Act, 1961.
By ET Bureau |
KOLKATA: The National Bank for Agriculture & Rural Development's (NABARD) latest Rs 5,000-crore bond offering for retail investors ��� the Nabard Rural Bonds ��� has very few takers. Retail investors seem to have totally shunned this investment option even if it qualifies for tax exemption under Section 80C of Income Tax Act, 1961.
NABARD chairman UC Sarangi has admitted that the lukewarm response has baffled the refinance bank and it is now examining ways to popularise the instrument. Nabard Rural Bonds offer a 8.25% annual interest to general investors while senior citizens get a 0.5 percentage point higher rate. The bonds are being issued for tenure of five years.
Nabard, which started marketing the bonds from January 26 this year, has managed to mobilise just about Rs 3.65 crore till March 31. In the current fiscal too, the story did not change with a mobilisation of Rs 1.80 crore, according to senior Nabard officials. ���We are looking into various options to improve the scene. Changing the coupon rate is one of the options,��� Mr Sarangi told ET.
Nabard is, however, getting a much better response to its Bhavisya Nirman Bonds (BNB), which is on offer since early 2007. During 2007-08, it mopped up Rs 2,000 crore through BNB.
For stepping up institutional finance to the agriculture sector, Nabard has enhanced its refinance plan to Rs 31,500 crore in 2008-09 compared with the preceding fiscal���s Rs 24,000 crore. So, it would require to mobilise a higher amount this fiscal.
NABARD chairman UC Sarangi has admitted that the lukewarm response has baffled the refinance bank and it is now examining ways to popularise the instrument. Nabard Rural Bonds offer a 8.25% annual interest to general investors while senior citizens get a 0.5 percentage point higher rate. The bonds are being issued for tenure of five years.
Nabard, which started marketing the bonds from January 26 this year, has managed to mobilise just about Rs 3.65 crore till March 31. In the current fiscal too, the story did not change with a mobilisation of Rs 1.80 crore, according to senior Nabard officials. ���We are looking into various options to improve the scene. Changing the coupon rate is one of the options,��� Mr Sarangi told ET.
Nabard is, however, getting a much better response to its Bhavisya Nirman Bonds (BNB), which is on offer since early 2007. During 2007-08, it mopped up Rs 2,000 crore through BNB.
For stepping up institutional finance to the agriculture sector, Nabard has enhanced its refinance plan to Rs 31,500 crore in 2008-09 compared with the preceding fiscal���s Rs 24,000 crore. So, it would require to mobilise a higher amount this fiscal.
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