The government has approved a proposal by the National Bank for Agriculture and Rural Development (Nabard) to raise up to ?19,500 crore through zero-coupon bonds, also known as deep-discount bonds for taxation purposes.The bonds, which can be issued on or before March 31, 2027 and the bonds could mature in 10 years, 11 months and 13 days, the Central Board of Direct Taxes said in a gazette notification. According to the notification, “the discount on the bonds will be ?10,349.6 crore, and the amount to be paid on maturity or redemption would be ?19,500 crore”.Zero-coupon bonds work by being issued at a discount to their face value, and no periodic interest (coupons) is paid. Investors earn their return by purchasing the bond at a lower price and receiving the full face value at maturity.