MUMBAI : The Reserve Bank of India will sell Consumer Price Index-linked National Savings Securities-Cumulative for retail investors from Monday, the central bank said in a press release late on Thursday. Subscription to the bonds would remain open till Dec 31.

The interest rate would comprise of two parts — fixed rate of 1.5% and inflation rate based on CPI — and the same will be compounded in the principal on half-yearly basis and paid at the time of maturity. “The final combined CPI will be used with a lag of three months, i.e., final combined CPI for September 2013 will be used as reference CPI for all days of December 2013,” the central bank said.
The RBI on Nov 29 had said inflation bonds maturing in 10 years will be launched as announced in the Union Budget 2013-14 to protect savings from inflation, especially the savings of the poor and the middle classes.
Earlier this year, the RBI had launched bonds linked to headline inflation based on the Wholesale Price Index but retail demand for the bonds was subdued.
Industry experts had opined that such certificates linked to the CPI–which often eat into financial savings of households–would help steer retail investment away from gold. -Cogencis

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