Mumbai, Jun 13 (KNN) The Reserve Bank of India (RBI) is planning to re-vamp the inflation-indexed bonds (IIBs) and is in discussions with the government for making it more attractive for retail investors.

The complex structure of the IIBs didn’t make it much successful with the investors. It was launched last year by RBI in the backdrop of the announcement made in the Union Budget 2013-14 to introduce instruments to protect savings from inflation, especially the savings of the poor and middle classes.

The proposed features will make sure the retail investor gets payouts at regular intervals and higher tax-adjusted returns.

Speaking on the sidelines of an investor conference here yesterday, Deputy Governor, RBI, Harun Rashid Khan said the apex bank has taken up the issue with the Government.
“We had launched inflation indexed bonds that were not successful. We are coming out with the revised version," Khan told reporters. 

He said that timing of the inflation indexed bonds launched last time was not possibly right and there were issues regarding understanding of the product and also related to interest pay out. 

"We have suggested a few things to the government. One, in terms of increasing the spread and whether we can have non-cumulative option. They (government) are considering, let us see," Khan said. 

He said that the central bank was looking to offer quarterly interest pay out unlike last time on quarterly basis when the pay-out was only on maturity. 

Meanwhile, he did not give any timeline for the launch of the revise inflation indexed bonds. 

When asked whether there was any plan to increase foreign institutional investors' investment limit in the government bonds, the deputy governor said, "right now there is no such discussion". 

Khan said the central bank and the government are in the process of preparing framework for differentiated banking licence. (KNN/SD)