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Tuesday 18 February 2020

Government bonds to be repaid 2 days in advance

New Delhi: The Ministry of Finance has announced today registered holders of central government bonds 8.07% Government Stock 2017 — to be paid at par on 13 January 2017. These are central government bonds that were issued on 15 January 2002, maturing on 15 January 2017 with an 8.07% coupon rate.

The ministry decided to pay the due 2 days in advance from the date of maturity of the bonds because 13 January 2017 is a bank holiday and 14 January 2017 is a Sunday.

If a State government declares a holiday on 13 January 2017, the designated offices in that state will repay loans on the previous working day. No interest will be accrued from 15 January 2017.

government bondsThe Government Securities Regulations Act, 2007, under its sub-regulations 24.2 and 24.3 says that the principal payment on maturity shall be made by a pay order incorporating relevant particulars of registered holder’s bank account or by credit to holder’s account in any bank having the facility of receipt of funds through electronic means. A registered holder of bonds held in the form of subsidiary general ledger or constituent subsidiary general ledger account or stock certificate are eligible for this method of discharge.

For repayment, the law says, the original subscriber or subsequent holders of such government securities shall submit information pertaining to their bank account in advance.

If the registered holder’s bank information is not furnished in advance, paying offices may not be able to process repayments through electronic means. In that case, they may tender the bonds, duly discharged.

They are enfaced or registered for payment of interest 20 days in advance of the due date for repayment at public debt offices, treasuries / sub-treasuries, branches of the State Bank of India (SBI) and associate banks for SBI.

Beneficiaries eligible for receiving the discharge value have to approach the aforementioned paying offices for full details.

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