RBI announces 7.49 pc interest rate on FRB 2016

Mumbai, May 6: The rate of interest on the Floating Rate Bonds, 2016 (FRB, 2016) shall be 7.49 per cent per annum for the year 2008-09, effective from tomorrow, RBI announced today.

It may be recalled that the rate of interest on the FRB, 2016 was set by the RBI at a mark-up (as decided at the auction held on May 6, 2004) over and above the variable base rate. The mark-up decided in the auction held on May 6, 2004 was (plus 0.04). The coupon rate has been fixed accordingly, a RBI release said.

Based on that, the variable base rate for payment of interest shall be the average rate (rounded off up to two decimal places) of the implicit yields at cut-off prices emerging in the three auctions of Government of India 364-day Treasury Bills immediately preceding the relative annual coupon reset date, which worked out to 7.45 per cent, the release added.

UNI