A Clarification

The Reserve Bank of India has clarified that it has no arrangements for automatic debit of the government of Maharashtra's account for the bonds being issued by Maharashtra Patbandhare Vittiya Company Limited (MHPVC).

The clarification is in response to a report published in Business Standard ("Bond with auto debit rider set for debut", August 6), which stated that MHPVC had promised prompt payment of bond dues to investors using the automatic debt facility of the Maharashtra government with the RBI.

The BS report was based on a discussion with Maharashtra government officials. The Maharashtra government wrote a letter to the RBI on February 3 authorising the RBI to debit the state government's current account for making payments of both principal and interest in respect of the proposed bond issue.

 

There was, however, no mention of any arrangement for automatic debit of the Maharashtra government's account. We regret the error.