RBI announces rate of interest on FRB 2012

The rate of interest on the Floating Rate Bonds, 2012 (FRB, 2012) applicable for the year (November 10, 2010 to November 9, 2011) shall be 7.08 percent per annum.

It may be recalled that the annual rate of interest on the FRB, 2012 was set at a spread (as decided in the auction held on November 7, 2003) over and above the variable base rate. 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 of the last three auctions of Government of India 364-day Treasury Bills held up to commencement of respective annual coupon  period. The variable base rate based on the average rate of the implicit yields at cut-off prices of the said last three auctions of Government of India 364-day Treasury Bills worked out to be 6.99 per cent. The Spread decided in the auction held on November 7, 2003 was (+) 0.09 (plus 0.09) per cent. The coupon rate has been fixed accordingly.

Ajit Prasad
Assistant General Manager

Press Release : 2010-2011/641