Skip to main content

Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)

Reserve Bank of India (RBI) has reset the half-yearly interest rate for Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T).

Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)

Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T) are the bonds issued by the Government of India with effect from July 01, 2020.

Sellers and investors of FRSB 2020 (T)

FRSB 2020 (T) are sold through ‘Receiving Offices’ such as State Bank of India, Nationalised Banks, four private sector banks and any other entity as authorised by RBI.

FRSB 2020 (T) can be held by –

  • A person resident in India – in individual / joint capacity or on behalf of a minor
  • Hindu Undivided Family (HUF)

Subscribing to FRSB 2020 (T)

  • FRSB 2020 (T) are issued at face value of ₹100/-.
  • The minimum investment in FRSB 2020 (T) shall be ₹1,000/- and thereafter in multiples of ₹1,000/-.
  • There is no maximum limit for investment in FRSB 2020 (T).

Tenor of FRSB 2020 (T)

  • FRSB 2020 (T) are repayable on expiry of 7 years from the date of issue.
  • Premature encashment of FRSB 2020 (T) is allowed for individual investors in the age group of 60 years and above after minimum lock-in period as below –

Age of the investor Minimum lock-in period from the date of issue
60 to 70 years 6 years
70 to 80 years 5 years
80 years and above 4 years

  • In case of joint holders or more than 2 bond holders, any one of the holders shall fulfil the above conditions.
  • After the minimum lock-in period, an eligible investor can surrender the bonds at any time but the redemption payment is made on the following interest due date (i.e. 1st July or 1st January) and 50% of the interest due and payable for the last 6 months of the holding period is recovered.

Payment for FRSB 2020 (T)

Payments for FRSB 2020 (T) can be made through cash (up to ₹20,000) / cheque / demand drafts / electronic banking. 

Financial benefits of holding FRSB 2020 (T)

  • The interest on FRSB 2020 (T) is paid at half-yearly intervals on 1st July and 1st January. 
  • The coupon / interest rate of FRSB 2020 (T) is reset on half-yearly basis on 1st July and 1st January and is linked / pegged with prevailing National Saving Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.
  • The interest on FRSB 2020 (T) is taxable under Income Tax Act, 1961 as per the tax status of the bond holder.

Holding FRSB 2020 (T)

FRSB 2020 (T) can be held in Bond Ledger Account (BLA) or Retail Direct Gilt (RDG) Account with RBI.

Transfer / trading of FRSB 2020 (T)

  • FRSB 2020 (T) held in BLA are not transferable.
  • FRSB 2020 (T) are not tradable in the secondary market.
  • FRSB 2020 (T) are not eligible as collateral for availing loans from banks, financial institutions and Non-Banking Financial Companies.

Commission to Receiving Offices for distribution of FRSB 2020 (T)

Commission for distribution of FRSB 2020 (T) is paid at the rate of 0.5% of the total subscription received by the receiving offices and receiving offices are required to share at least 50% of the commission so received with the agents / sub agents for the business procured through them.

Forms relating to FRSB 2020 (T)

  • Certificates of Holding (Form A) issued to the subscriber
  • Applications (Form B)
  • Nomination request (Form C) or cancellation of existing nomination (Form D)

Reset of FRSB 2020(T) coupon / interest rate

The coupon rate on FRSB 2020 (T) for the period July 01, 2024 to December 31, 2024 and payable on January 1, 2025 remains at 8.05% (7.70%+0.35%), unchanged from the previous half-year.


References

Government of India. (2020, June 26). 'Notification - Floating Rate Savings Bonds, 2020 (Taxable) – FRSB 2020 (T)'. Retrieved from https://rbidocs.rbi.org.in/rdocs/content/pdfs/GOI26062020.pdf

Reserve Bank of India. (2023, October 23). 'Subscription to Floating Rate Savings Bonds, 2020 (Taxable) through RBI Retail Direct Portal'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56614

Reserve Bank of India. (2024, July 01). 'Rate of Interest on Floating Rate Savings Bond, 2020 (Taxable) – FRSB 2020(T) for the Period July 01, 2024 – December 31, 2024'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58200


Follow at - Telegram   Instagram   LinkedIn   X   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Digital Payments – E-mandate Framework 2026

Reserve Bank of India (RBI) has issued e-mandate framework for digital payments. What is an e-mandate?  A mandate is a standard instruction that a customer provides to his / her issuing bank and other institutions allowing them to automatically debit the mentioned amount from his / her bank account. e-mandate is the electronic version of it. To whom shall the framework be applicable? The framework shall be applicable to Payment System Providers and Payment System Participants. To which transactions shall the framework be applicable? The framework shall be applicable to processing of recurring transactions, domestic or cross-border, using cards / Prepaid Payment Instrument (PPI) / Unified Payments Interface (UPI). What are the guidelines for registration and revocation of e-mandate? A customer desirous of opting for e-mandate facility shall undertake a one-time registration process. The mandate shall be registered only after successful validation of additional factor of authenticati...
Post a Comment
Read more

Guidelines to facilitate faster cross-border inward payments

Reserve Bank of India (RBI) has issued guidelines to facilitate faster cross-border inward payments. What is the rationale behind the guidelines? The RBI’s Payments Vision 2025 aims to bring efficiency in the cross-border payments aligning with the G20 roadmap for cross-border payments that has set targets for achieving cheaper, faster, more transparent, and more accessible cross-border payments. One of the challenges with speed of cross-border payments is experienced at the beneficiary leg i.e., the time taken from receipt of the payment at the beneficiary bank till credit to the beneficiary account. What are the guidelines to facilitate faster cross-border inward payments? Banks shall inform their customer of the receipt of cross-border inward transactions immediately on receipt of inward message. Messages received after close of operating hours of banks shall be informed to customer immediately at the start of the next business day. Banks shall undertake reconciliation and confirmat...
1 comment
Read more

Utkarsh 2029

Reserve Bank of India (RBI) has published its medium-term strategy framework – Utkarsh 2029, for the period April 2026 to March 2029. Utkarsh RBI had first formulated its medium-term strategy framework, viz. ‘Utkarsh 2022’ for the period 2019-2022 in July 2019, replacing its annual action plans as the latter spanned over a short period, insufficient to pursue strategic objectives.  The strategic framework contained, inter alia, RBI’s Mission, Core Purpose, Values and Vision Statements, reiterating RBI’s commitment to the Nation. It became a medium-term strategy document guiding RBI’s progress towards realisation of the identified milestones. The subsequent strategy framework, i.e., ‘Utkarsh 2.0’, spanned the period 2023-25. Utkarsh 2029  Utkarsh 2029 is the medium-term strategy framework for the period April 2026 to March 2029. Utkarsh 2029 has a 3-layered structure consisting of strategy pillars guided by the vision and values of RBI. Vision of Utkarsh 2029 – Continue excelle...
Post a Comment
Read more

Credit Information Reporting

Reserve Bank of India (RBI) had issued directions on credit information reporting by the regulated entities. What are Credit Information Companies (CICs)? Credit Information Companies (CICs) mean companies that have been granted a certificate of registration by RBI under section 5 of the Credit Information Companies (Regulations) Act, 2005 (CICRA).  The following CICs are registered with RBI – CRIF High Mark Credit Information Services Private Limited Equifax Credit Information Services Private Limited Experian Credit Information Company of India Private Limited TransUnion CIBIL Limited What are Credit Institutions (CIs)? Credit Institutions (CIs) mean the following institutions – Commercial Banks  Small Finance Banks (SFBs) Local Area Banks (LABs) Regional Rural Banks (RRBs) Primary (Urban) Co-operative Banks (UCBs) Rural Co-operative Banks – State Co-operative Banks (StCBs) Central Co-operative Banks (CCBs) All India Financial Institutions (AIFIs) regulated by RBI – Export I...
Post a Comment
Read more

Guidelines on Money Changing Activities (Updated as on April 02, 2026)

Reserve Bank of India (RBI) has updated the guidelines on money changing activities. Who is Authorised Person? Authorised Person means an authorised dealer, money changer, off-shore banking unit or any other person authorised under section 10(1) of Foreign Exchange Management Act, 1999 (FEMA) to deal in foreign exchange or foreign securities. What are the categories of Authorised Persons? Authorised Dealer (AD) Category-I – entities which are authorised by RBI to carry out all permissible current and capital account transactions. Authorised Dealer (AD) Category-II – entities which are authorised by RBI to carry out specified non-trade related current account transactions, all the activities permitted to Full Fledged Money Changers (FFMC) and any other activity as decided by RBI, and include (i) Upgraded FFMCs; (ii) Select Regional Rural Banks (RRBs); (iii) Select Urban Cooperative Banks (UCBs); and (iv) Other entities. Authorised Dealer (AD) Category-III – entities which are authorised...
Post a Comment
Read more