Current affair diary 1/1/2020

Subject: Economy

Zero coupon bonds

√The government has used financial innovation to recapitalise Punjab & Sind Bank by issuing the lender Rs 5,500-crore worth of non-interest bearing bonds valued at par.

√ These are special types of zero coupon bonds issued by the government after proper due diligence and these are issued at par.

√ These are “non-interest bearing, non-transferable special GOI securities”.

√ They have a maturity of 10-15 years and issued specifically to Punjab & Sind Bank.

√These recapitalisation bonds are special types of bonds issued by the Central government specifically to a particular institution.

√ It is not tradable, it is not transferable.

√ It is held at the held-to-maturity (HTM) category of the bank as per the RBI guidelines.

?focus area for prelims 2021
√government securities
√zero coupon bonds ans characteristics



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