PSU Bonds
The public sector undertakings
issue the PSU Bonds, a special debt instrument in character, with tax
incentives to the public and financial institutions. However, large portions of
these issues are privately placed either with banks or other financial
institutions.
Certificate of Deposits
Anther special debt instrument,
a short-term debt, issued by banks is Certificate of Deposits. These are issued
within the ceiling specially prescribed for them. The maturity period for these
instruments range from 3 months to one year with varying interest rates.
Deep discount bonds
Is a bond with higher face
value, but issued at a deep discount and redeemed at the maturity of specified
number of years at face value. The bonds may also be sold, if necessary, at
short period for a deemed face value. The difference between the sale price and
original cost of acquisition of these bonds is treated as capital gain. The
ICICI, IDBI and SIDBI have issued bonds of this type.