Govt to withdraw 7.75% Savings (Taxable) Bonds scheme from 28 May

New Delhi: The government has decided to withdraw 7.75 per cent Savings (Taxable) Bonds scheme from the close of banking business on Thursday due to declining interest rates.

The scheme, commonly known as RBI Bonds or GOI bonds, is popular among retail investors who looking for safety of principal and a regular income. NRIs, however, are not eligible for making investments in these bonds.

"The Government of India, hereby notifies that the 7.75 per cent Savings (Taxable) Bonds, 2018...shall cease for subscription with effect from the close of banking business on Thursday, the 28th of May, 2020," said a notification on Wednesday.

The Reserve Bank of India too has notified the Cessation of 7.75 per cent Savings (Taxable) Bonds, 2018. Interest on the Bonds is taxable.

The Bonds are issued at par at ₹100. The minimuim subscription was fixed at ₹1,000.

As per the scheme, the Bonds are be repayable on the expiration of seven years from the date of issue.

The interest rate on bank fixed deposits as well as lending rates are on decline with the Reserve Bank of India lowering the key short-term lending (repo) rate. The repo rate is currently at historic low of 4 per cent.