IDBI to pay interest on the pre-1992 Deep Discount Bonds: FM
Press Trust of India / New Delhi Jul 14, 2009, 14:55 IST
IDBI will pay interest on Deep Discount Bonds issued in 1992 that have not been redeemed, Finance Minister Pranab Mukherjee informed the Rajya Sabha today.
Replying to questions, Mukherjee said the erstwhile Industrial Development Bank of India (IDBI) had issued Deep Discount Bond (Series-I) in March 1992.
IDBI issued the bonds at a price of Rs 2,700 per bond and on maturity in 2017 Rs 1 lakh was payable.
"As per the terms of the issue, the investor had the option to withdraw and IDBI had the option to redeem the bond at the end of every 5 years," he said. "IDBI exercised the call option at the end of 10 years."
Of the nearly 11 lakh bond holders, about 10 lakh were paid back the deemed face value of the bond at the end of 10 year period on March 31, 2002, he said.
IDBI has since transformed into a commercial bank and as per the RBI policy, interest rate comparable to savings rate (3.5 per cent) must be paid on unpaid money lying with a commercial bank, he said.
Mukherjee said in terms of section 193 of the Income Tax Act, 1961, tax is required to be deducted at source in case interest income exceeds Rs 2,500 during the financial year. "IDBI is accordingly deducting tax at source at applicable rates from interest income."
IDBI has issued fresh intimation to the remaining 10 per cent bond holders to redeem the bonds, he added.
I have witdrawal my dipdicount bond on 11.12.09. in IDBI Bank, Vidyanagar Branch (Gujarat). Up to Today I have no corrospondance from your side. So please do needful.
Thanking you
its ok that idbi will pay the iontrest on the bonds, but these bond's amount was lying at idbi bank as a investment for future & as commitment of interest of 12%. now its said that only saving intrest will be given on the bonds, which is unfare.
these means custmer's instment are also not safe in banks, if the investment in bonds are being redeemed by saying that bank is not able to pay the interest on custmer's investment.
further in this trend other bank can also redeem the Fix Deposit when they want by saying that bank are unable to pay the interest.
authorities should look into this case & do the needfull so that the bond holder can get their investment money with that intrest rate which was applied at that time which was 12%.
With Regards,
M.L.Menaria
9983233740, 9928478203.
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