There will be no conditions for speculations with federal loan bonds for the population for now, according to Sergei Storchak, Deputy Minister of Finance, Vestifinance reports.

It is assumed that, at the first stage, the conditions will be very conservative.

“In this case, we are focusing on those who will save”, claimed Storchak, stressing that this tool is intended for individuals only, not for commercial transactions, including secured lending operations.

“This is the first stage: it is very conservative, only agent banks can participate, and there is a limit on the investment amount”, said the Deputy Minister of Finance.

To prevent risks for the public, there will be no secondary market.

“We’ve decided to eliminate the risk. After the first stage – placement of RUB 20 bn – we will gather information and consider our next steps”, he explained.

According to Storchak, there is no exact assessment of the demand – “RUB 20 to 30 bn. RUB 10 bn is a big difference.”

The federal loan bonds for the population should be a sort of blend of a bank deposit and a market federal loan bond. At the same time, while anticipating a reduction in the Central Bank rates, banks do not offer the public attractive conditions for deposits lasting more than one year. Moreover, the deposit insurance system guarantees a return of only RUB 1.4 m. At the same time, the profitability of federal loan bonds for individuals grows depending on the period of security ownership and, with a three-year ownership, the profitability of a federal loan bond will exceed that of bank deposits.

The volume of the first placement of the federal loan bonds for the public will be RUB 20 bn, the securities circulation period will be three years, and the nominal value of one federal loan bond will be RUB 1 thousand. The minimum purchase price of bonds of one issue will be RUB 30 thousand and the maximum purchase price will amount to RUB 15 m.

Annually, the Ministry of Finance intends to place federal loan bonds for individuals for RUB 20 to 30 bn; however, if the demand for securities proves to be high, the Ministry of Finance is ready to increase the issue volume. Each new issue will take place every six months.

Buyers of federal loan bonds will have to pay a commission to the bank that sells the securities in the amount of 1.5% when buying federal loan bonds for a sum of up to RUB 50 thousand, 1% for RUB 50 thousand to 300 thousand, and 0.5% for over RUB 300 thousand.

The agent banks for placement of the federal loan bonds for individuals will be Sberbank and VTB.