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Floating Rate Savings Bonds 2020 (Taxable): Updated RBI Guidelines for NRI Investors

The Reserve Bank of India issued revised operational guidelines on April 2, 2026 for Floating Rate Savings Bonds 2020 (Taxable), superseding the previous June 2020 guidelines. These bonds remain a key investment vehicle for eligible investors including NRIs, with updated procedures for application, account opening, interest payments, and claim handling now in effect.

Source: RBI — Notifications — Thu, 02 Apr 2026 21:25:00

Official source

Floating Rate Savings Bonds 2020 (Taxable): What NRIs Need to Know

What Changed and When

On April 2, 2026, the Reserve Bank of India released fresh operational guidelines for Floating Rate Savings Bonds 2020 (Taxable) — commonly called FRSB 2020 (T). These new guidelines replace the earlier version from June 30, 2020 (which was updated on June 27, 2022). The revised guidelines became effective immediately from the date of the circular.

If you hold these bonds or plan to invest in them, you should know about the updated procedures for opening accounts, submitting applications, receiving interest payments, and handling redemptions.

Who Can Invest in These Bonds

The bonds are issued by the Government of India through authorized Receiving Offices (ROs) — primarily select commercial banks and other entities approved by the RBI. Eligibility criteria and terms are set out in the Government of India Notification No. F.No.4(10)-B(W&M)/2020 dated June 26, 2020, as amended from time to time.

NRIs who meet the eligibility requirements specified in that notification can subscribe to these bonds. You should verify your eligibility with your bank or the RBI before applying.

How to Apply: Online and Offline Routes

Application Submission

You can submit your application through two channels:

1. Offline route: Fill Form 'B' (provided in the notification) and submit it directly at any branch of an authorized Receiving Office, or through a broker appointed by the RO.

2. Online route: All ROs must now offer online application submission. If your bank hasn't launched this yet, they must do so by September 30, 2026. The online form captures all the same details as the paper form.

Payment Methods

You can pay your subscription amount in the following ways:

  • Cash: Up to ₹20,000 only
  • Demand draft or cheque: Drawn in favour of the Receiving Office
  • Electronic modes: Any method the RO accepts (such as net banking, NEFT, RTGS, etc.)
The RO will issue you an acknowledgement specifying when your Certificate of Holding (CoH) will be issued in electronic form.

PAN and KYC Requirements

You must provide your Permanent Account Number (PAN) issued by the Income Tax Department when applying. If you don't have a PAN, you can submit a declaration in Form No. 97 as specified in Rule 159 of the Income Tax Rules, 2026.

Special rules apply if you are a minor:

  • If you're a minor with no income and no PAN, you can quote the PAN of either parent or guardian.
  • If you're a minor earning income but without a PAN, you must submit Form No. 97.
All ROs regulated by the RBI must follow the RBI's Know Your Customer (KYC) Directions 2025 when opening your Bond Ledger Account (BLA). Other ROs follow their respective regulator's KYC guidelines.

Your Bond Ledger Account (BLA)

Once your application is approved, the RO opens a separate Bond Ledger Account for you in electronic form. Each account receives a unique six-digit code with an alphabetic prefix showing the bank and branch (for example: SBIPNBLA 000001 for State Bank of India, Pune).

Important point: If your branch closes, merges, or relocates, your BLA number stays the same. You don't need to worry about losing your account identity.

Multiple Investments Under One Account

If you make multiple investments with the same RO, all of them go into your existing BLA. The RO will not open separate accounts for each investment. After every new investment, you'll receive an updated Certificate of Holding showing all your holdings under that BLA.

When Your Bonds Are Credited

Your bonds are issued in electronic form and credited to your BLA on:

  • The date you tender cash, OR
  • The date the demand draft/cheque is realized, OR
  • The date the RO receives electronic funds
This date becomes your "Date of Issue" and "Investment Date" on your Certificate of Holding. Your bond tenure runs from this date.

Certificate of Holding (CoH)

The RO must issue your CoH within three working days of receiving or realizing your funds. The CoH is your proof of subscription and contains all investment details.

The RO will also email your CoH to the email address you provided in your application form. If you lose your CoH, you can request a duplicate from the RO.

Interest Payments and Redemptions

The guidelines cover detailed procedures for:

  • Interest payments: How and when floating rate interest is credited to your account
  • Premature encashment: Rules for withdrawing your money before maturity
  • Repayment on maturity: How your principal is returned when the bond matures
  • Nomination: You can nominate a person to receive your bonds if you pass away
  • Death claims: Procedures for your nominee or legal heirs to claim the bonds
  • Unpaid or unclaimed payments: How the RO handles interest or principal that remains unclaimed
The RBI's guidelines specify exact procedures for each of these scenarios, which your RO must follow.

Withdrawal Before Remitting Funds

If you change your mind after submitting an application but before the RO receives your payment, you can withdraw your subscription. The RO must process this withdrawal request promptly.

Record Keeping and Compliance

Each branch of an RO maintains a "Register of Bond Ledger Accounts" showing all bond holders. One office or branch of each RO is designated as the "Link Cell" — this is the central hub that maintains electronic records for all individual BLA holders' investments.

The RO must preserve your filled-in application forms according to the guidelines (see section on record preservation below). They may keep scanned copies for operational convenience.

Record Preservation Period

The guidelines specify how long ROs must keep records related to your bonds. You should ask your RO about their record preservation policy if you need historical documents.

Grievance Redressal and Investor Services

Each RO must have a mechanism to handle investor complaints and provide grievance redressal. If you face any issues with your bond account, application processing, or payment of interest/principal, you can raise a grievance with the RO's investor services team.

Brokers and Sub-Agents

ROs may appoint brokers or sub-agents to help distribute these bonds. If you apply through a broker, the RO still opens your account and handles all servicing directly.

Key Dates to Remember

  • April 2, 2026: These revised guidelines became effective
  • September 30, 2026: All ROs must have online application facilities available
  • September 30, 2026: All branches of bank ROs handling government business (and all branches of non-bank ROs) must accept applications and collect subscription amounts

Why This Matters for NRI Investors

Floating Rate Savings Bonds are a taxable investment option issued by the Government of India. Unlike some other government securities, the interest on these bonds is subject to income tax. However, they offer:

  • Government backing: Issued by the Government of India through RBI
  • Floating rate: Your interest rate adjusts periodically based on market conditions
  • Liquidity options: You can encash prematurely if needed (subject to terms)
  • Electronic holding: No physical certificates; everything is digital
  • Nomination facility: You can nominate a beneficiary
For NRIs, these bonds fit into a broader portfolio of Indian government securities and fixed income instruments. The updated guidelines make the application and account management process more transparent and standardized across all ROs.

Next Steps

1. Verify your eligibility: Check the Government of India Notification No. F.No.4(10)-B(W&M)/2020 to confirm you can invest 2. Gather documents: Have your PAN ready, or Form No. 97 if you don't have a PAN 3. Contact your bank: Ask if they're an authorized Receiving Office and whether they offer online applications 4. Submit your application: Use either the online or offline route, depending on what your bank offers 5. Keep your CoH safe: This is your proof of investment

Important Disclaimer

These guidelines are technical and operational in nature. They govern how ROs process applications, maintain accounts, and handle payments. For tax implications specific to your situation as an NRI, consult a tax professional. For investment suitability, speak with a financial advisor.

The full operational guidelines contain additional sections on audit, compliance, reconciliation, reporting, penalties, and other administrative matters. If you need details on any specific procedure, ask your RO or contact the RBI's Public Debt Office.