The Hindu : Govt. issues UTI Bonds worth Rs. 328 cr.

Online edition of India's National Newspaper
Thursday, Mar 25, 2004

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Govt. issues UTI Bonds worth Rs. 328 cr.

NEW DELHI, MARCH 24. The Government today issued special six-year bonds worth Rs. 328 crores for meeting Unit Trust of India's shortfall in the assured return scheme.

The `Government of India UTI Bonds' carries interest rate of 6.2 per cent and matures on 2010.

In a statement, the Union Finance Ministry said the bonds had been issued to the administrator of Specified Undertaking of UTI (SUUTI) for meeting their liabilities arising on account of shortfall in the assured return scheme.

The investment in the UTI bonds will not be eligible for statutory liquidity ratio (SLR) of banks and FIs.

The bonds can be transferred and eligible for market ready forward or repo transactions.

However, it will not be eligible for repo or reverse repo transaction with the Reserve Bank of India.

The UTI bonds are being issued to give investors a choice of switching either to debt papers yielding high returns or taking cash for those schemes that are being foreclosed before their maturity date.

Earlier, it was decided that the Government will issue 6.6 per cent tax-free bonds aggregating up to Rs. 5,000 crores to investors for the seven assured return schemes of UTI that are being prematurely closed this fiscal.

The bonds would be offered as a conversion option to investors of seven schemes — Children Gift Growth Fund of 1986 (CGCF-86), Children Gift Growth Fund of 1999 (CGCF-99), Bhopal Gas Victims MIP 1992 (BGVMIP), Monthly Income Plan of 1998 and 1999, Rajlakshmi Unit Plans of 1994 and 1999.

The Government has made budgetary allocation for foreclosing these high assured return schemes.

PTI

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