As a part of the Govt borrowing programme and to provide protection to investors the reserve bank of India has decided to issue the Capital indexed bonds or also called as inflation adjusted bonds. These bonds are issued with the objective of boosting the debt markets as well increase the retail investor participation in Govt borrowing programme. The RBIIIB would come under the Govt securities category and all the eligible investors who can invest in Govt securites would also be able to invest in Inflation indexed bonds.
The investment would happen through competitive bidding mechanism on last Tuesday of every month starting June 2013 during the FY 2013 -2014. However a part of the auction would be reserved for retail investors which is initiallly 5% of the notified amount for the non-competitive bidding. The interest rate applicable would be on net yield basis and whatever the yield is finalized during the competetive bbidding would also be applicable to non - ocmpetitive bidding for retail investors. However to increase retail investor's participation such portion of the non-competetive bidding may increase upto 20% in futurre.
An exclusive series would be launched for retail investors during the second half of 2013 i.e. around October 2013, which would be notified later on.
For more details and Q & A related to RBI inflation adjusted bonds or inflation indexed bonds you can follow the link and go to RBI website for more details
However if your queries aren't answered or you didn't understand one of the points you an always raise your query here and we would search our resources to answer your query. Should you wish to invest in RBI Capital indexed bonds you can submit your query here.