The rate of interest on the Floating Rate Bonds, 2017 (FRB, 2017) applicable for the half-year (January 2, 2014 to July 01, 2014) shall be 9.33 per cent per annum.

It may be recalled that the rate of interest on the FRB, 2017 was set at a mark-up (as decided in the auction held on July 1, 2002) 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 six auctions of Government of India 364-day Treasury Bills held up to the commencement of the respective half yearly coupon period which works out to be 8.99 per cent. The mark-up decided in the auction held on July 1, 2002 was (+) 0.34 per cent (plus 34 basis points). The coupon rate has thus been fixed at 9.33 per cent.

Ajit Prasad

Assistant General Manager

Floating rate bond coupon determination based on Treasury bill yield average plus auction markup fixes coupon. Rate of interest on Floating Rate Bonds, 2017 for the half-year Jan 2, 2014 to July 1, 2014 is fixed at 9.33% per annum, calculated as the variable base rate - the average implicit yields of the last six Government of India 364-day Treasury Bill auctions (rounded to two decimals, 8.99%) - plus the auction-determined mark-up of 0.34% set on July 1, 2002.