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RBI allows premature encashment of 8% Savings Taxable Bonds

However, partial encashment of amount invested on a single application is not permitted

August 31, 2013 11:43 IST | India Infoline News Service
The Reserve Bank of India has allowed premature encashment of 8% Savings (Taxable) Bonds for individual investors who are 60 years and above.

Lock-in period for investors in the age bracket of 60 to 70 years shall be 5 years from the date of issue, RBI said in a notification on Friday.

Lock-in period for investors in the age bracket of 70 to 80 years shall be 4 years from the date of issue. Lock-in period for investors of the age of 80 years and above shall be 3 years from the date of issue, it added.

An investor, desiring to avail of the facility of premature encashment, will have to submit documentary evidence in support of his/her date of birth to satisfaction of the agency bank, it said.

In case of joint holders or more than two holders of a Savings (Taxable) Bonds, 2003, any one of the holders should fulfil the above conditions of eligibility, it said in a communication to heads of all public sector banks.

However, partial encashment of amount invested on a single application is not permitted. Premature encashment of investment may be allowed even after despatch of interest warrant.

Suitable instructions to designated branches operating the scheme may be issued to make the changes in the system to absorb the premature encashment process, it added.

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