Inflation rate will be based on the final combined Consumer Price Index [(CPI) base: 2010=100].

The final combined CPI will be used as reference CPI with a lag of three months. For example, the final combined CPI for September 2013 will be used as reference CPI for whole of December 2013.

There will be two parts in the interest rate. One, fixed rate of 1.5% per annum and second, inflation rate.

For example, if inflation rate during the six months is 5%, then interest rate for this six months would be 5.75% (i.e. fixed rate -0.75% and inflation rate -5%).

Yes, fixed rate of 1.5% would act as a floor, which means that 1.5% per annum interest rate is guaranteed if there is deflation.

For example, if inflation rate is (-) 5%, then interest rate should be (-) 3.5% by simple calculation. But in such case, negative inflation will not be recognised and investors would get fixed rate of 1.5% (please see example 2 at 23).

Investors can invest through the authorised banks and Stock Holding Corporation of India (SHCIL).

They will fill an application form and submit the same along with other documents and payment to the bank.

On receipt of money, the bank will register the investor on the RBI’s web-based platform (E-Kuber) and on validation, generate the Certificate of Holding.

These securities will be issued in the form of Bonds Ledger Account (BLA).

The securities in the form of BLA will be issued and held with RBI and thus, RBI will act as central depository.

A certificate of holding will be issued to the holder of securities in BLA.

Investor does not need to open a BLA with any bank for making investment.

After receiving the money and registration of the investor on RBI’s CBS (E-Kuber), the RBI will open a BLA for each investor and issue a “Certificate of Holding” indicating number of units of IINSS-C held by the investor.

The banks through which these securities have been purchased will provide other customer services.

Investors can approach the banks for other services such as change of address, early redemption, nomination, lien marking, etc.

The minimum investment limit is Rs. 5,000/- (five thousand).

The maximum limit is Rs. 10 lakh per annum for eligible individual investors and Rs. 25 lakh per annum for institutions such as HUFs, Charitable Trusts, Education Endowments and similar institutions which are not pro-profit in nature.

Yes premature redemption is allowed.

For senior citizens above 65 years, the premature redemption is allowed after one year. For others, it is allowed after 3 years.

Penalty at the rate of half of the last payable coupon will be charged from the investors. For example, if last payable coupon is Rs. 1,000/-, then Rs. 500 would be charged as penalty..

In case of redemption prematurely before the maturity date, investors can approach the concerned bank few days before the coupon date and apply.

In case of redemption on maturity, the investor will be advised one month before maturity regarding the ensuing maturity of the bond advising them to provide a Letter of Acquaintance, confirming the NEFT account details, etc.

If everything is in order, the investor has to be paid immediately on the maturity date for payments through electronic mode and within maximum five days for any payment through physical instruments.

Transferability is allowed to the nominee(s) only for individual investors on death of holder.

Transferability is not allowed for other investors

Existing taxation applicable to Government of India securities will be applicable to these securities.

Sub-section (iv) of the Section 193 of the Income Tax Act, 1961 stipulates that no tax shall be deducted from any interest payable on any security of the Central Government or a State Government, provided that nothing contained in this clause shall apply to the interest exceeding rupees ten thousand payable on 8% Savings (Taxable) Bonds, 2003 during the financial year.

As per the above Section, TDS shall not be deducted from any interest payable on IINSS-C, until and unless notified by the Government of India otherwise.