The Reserve Bank of India on Wednesday announced that the 7.75% Savings (Taxable) Bonds scheme would no longer be available after Thursday due to declining interest rates. The scheme, commonly known as RBI Bonds or Government of India bonds, is popular among retail investors looking for a risk-free investment.

“The Government of India announces that 7.75% Savings (Taxable) Bonds, 2018 shall cease for subscription with effect from the close of banking business on Thursday, the 28th of May, 2020,” the RBI’s press release read.

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The bonds are issued at par at Rs 100, with a fixed minimum subscription of Rs 1,000. As per the government scheme, the bonds are repayable after seven years from the date of issue.

Last week, the central bank had announced its decision to cut key interest rates to address the economic fallout of the coronavirus pandemic. The repo rate – the interest rate at which the top bank lends to commercial banks – was reduced from 4.4% to 4%. The reverse repo rate – the rate at which the central bank borrows funds from commercial banks – was cut to 3.35%.

In a series of tweets, Senior Congress leader P Chidambaram on Thursday hit out at the government for discontinuing the scheme. “Government has dealt another blow to citizens who save, especially senior citizens,” he said. “It has discontinued the 7.75 per cent RBI Bonds. Every government is bound to provide at least one safe, risk-free investment option to its citizens. It was the RBI bond since 2003.” The Congress leader also called for the restoration of the scheme.

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Following the Centre’s announcement of the economic package of Rs 20 lakh crore, the former finance minister had claimed that it actually amounted to only Rs 1.86 lakh-crore, or 0.91% of the Gross Domestic Product. He had added that the package, brought in to combat the adverse economic effects of a lockdown imposed to restrict the spread of the coronavirus, has left several sections of the society “high and dry”.

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Covid-19: Centre’s economic package amounts to only Rs 1.86 crore, claims P Chidambaram