It refers to central government deciding to replace 8 per cent RBI bonds with fixed six-year maturity with new bonds with decreased interest-rate of 7.75 per cent per annum. These bonds still remain the best government-sponsored savings-means even with reduced interest-rates. But people in general are not much aware these bonds, with their availability restricted to very few bank-branches of private and public-sector banks. Reserve Bank of India (RBI) and central government should ensure that these bonds may be compulsorily available at all branches of all public-sector banks abolishing hefty 1 per cent commission being paid to authorised brokers.
Private Banks may be free to accept subscription to these bonds but with reduced net commission of just quarter-per cent with no commission for public-sector banks. It is significant that even Life Insurance Corporation of India (LIC) is giving very nominal commission on Pradhan Mantri Vaya Vandana Yojana as compared to LIC’s popular pension-plan named Jeevan Akshay. All government-sponsored savings-schemes presently available through post-offices should also be available at all branches of all public-sector banks without any commission. Private Banks may also accept deposits to such schemes but with nominal commission of quarter-per cent.
Subhash Chandra Agrawal
(The views expressed by the author in the article are his/her own.)