The much-touted launch of Dada-Dadi bonds from April 1 has been postponed by two months pending a comprehensive review of all small savings instruments by the finance ministry and the Reserve Bank of India.

"There will be no launch of Dada-Dadi bonds on April 1. The committee reviewing the small savings instruments needs more time. The time has been extended to May 31," finance ministry sources said on Thursday.

Finance Minister Jaswant Singh had announced the launch of Dada-Dadi bonds in his interim budget to give pensioners another option to earn high return in an otherwise falling interest rate era.

"The postponement of Dada-Dadi bonds has nothing to do with elections," they said, adding the bonds cannot be out of line with existing small savings instruments and priced in isolation.

The committee on small savings, headed by RBI Deputy Governor Rakesh Mohan, is yet to decide on the returns from the proposed bonds.

Though finance minister had earlier indicated that Dada-Dadi bonds would co-exist with LIC's Varishtha Pension Bima Yojana, the committee would consider the implication of having two separate schemes for senior citizens.

The committee would also review whether to allow more than one family member to invest in Varishtha, which offers 9 per cent assured return to pensioners.

The government has provided Rs 150 crore (Rs 1.50 billion) in the budget as interest subsidy to LIC for Varishtha.