Finance Ministry issues notification on special securities

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On November 8, the Budget Division, Department of Economic Affairs, Ministry of Finance, Government of India, issued a notification on the issue of (i) 7.74 percent (Non-transferable) Special Gol Security, 2028; (ii) 7.81 percent (Non-transferable) Special Gol Security 2029; (iii) 7.88 percent (Non-transferable) Special Gol Security 2030; (iv) 7.95 percent (Non-transferable) Special Gol Security 2031; (v) 8.03 percent (Non-transferable) Special Gol Security 2032; and (vi) 8.11 percent (Non-transferable) Special GoI Security 2033 (hereinafter briefly described as "the Special Security").

The notification provides for the following:

1. Eligibility for Subscription and Limit of Subscription:

(i) Allahabad Bank (Public Sector Bank) as referred to in the Annexure hereto shall only be eligible to subscribe to the special securities and its subscription to the securities shall be limited to the extent of the amount, as shown in the Annexure.

(ii) No other person, including any bank, company, corporation, or any other body except the Allahabad Bank (Public Sector Bank) as referred to in aforesaid Annexure shall be eligible to subscribe to the special securities.

2. Price and Date of Issue:

(i) The special securities will be issued at par for the amount as per the application made by the eligible bank.

(ii) The date of issue of the special securities will be the date of receipt of subscription from the eligible bank.

3. Form of Security:

The special securities will be issued in the form of "Stock" to be held at credit of the investing bank's Subsidiary General Ledger Account maintained with Public Debt Office, Reserve Bank of India, Mumbai.

4. Interest and Repayment:

The special securities shall be repayable at par on the date of maturity as indicated against each security. Interest on the special securities will be payable at half yearly intervals, reckoned from the date of issue of the security. Interest on the security will be payable at Public Debt Office of Reserve Bank of India at Mumbai.

5. Transferability and Conversion:

The special security shall not be transferable and conversion in any other form of security shall not be permitted.

6. Statutory Provisions:

With respect to any such matter which has not been provided under this Notification, the special security shall be governed by the Government Securities Act, 2006 and the Government Securities Rules, 2007 framed thereunder.

7. Applicability of Tax Laws:

The value of the investment in the special security and the interest payable thereon will be governed by the provisions of tax laws as applicable from time to time.

8. Eligibility of Investment in Special Security:

The investment in the special security by the investing bank would not be considered as an eligible investment which they are required to make in Government securities in pursuance of any statutory provisions or directions applicable to the investing bank.

9. HTM Status:

As per RBI Circular DBR No. BP.BC.6/21.04.141/2015-16 July 1, 2015 on Prudential Norms for Classification, Valuation, and Operation of Investment Portfolio by Banks, the special securities can be held under HTM portfolio without any limit.

To view the entire Official Notification in detail, including the Annexure and the rate of interest payable on the abovementioned securities, please view the file attached herein.

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