Senior Congress leader P. Chidambaram on Thursday hit out at the government for discontinuing the RBI Bonds scheme, saying it is another 'cruel blow' to the citizens.

He said the government has dealt another blow to the citizens who save, especially senior citizens, as it has discontinued the 7.75 per cent RBI Bonds.

Deploring the government action, he urged people to demand from the government that the RBI Bond be restored immediately.

'After lowering the interest rates in PPF and small savings instruments, the abolition of the RBI Bond is another cruel blow,' he said on Twitter.

'All citizens must demand that the RBI Bond must be restored immediately,' the former finance minister said.

Chidambaram said the government did this once before in January 2018.

'I protested vehemently. Next day they re-introduced the bond but reduced the interest rate from 8 per cent to 7.75 per cent,' he noted.

He said effectively, after tax, the bond will yield only 4.4 per cent. 'That is now taken away. Why? I deplore this action,' he said.

He said every government is bound to provide at least one safe risk-free investment option to its citizens and 'it was the RBI bond since 2003'.

The government discontinued the 7.75 per cent Savings (Taxable) Bonds scheme, 2018, by issuing a notification that said that they shall cease for subscription with effect from the close of banking business on May 28.