India, March 12 -- The Pune Municipal Corporation (PMC) will have to return Rs.200 crore raised through its first municipal bond next year, nearly a decade after the funds were mobilised from the capital market but remained largely unused for civic projects.

PMC accounts officer Ulka Kalaskar said the civic body had raised Rs.200 crore through a municipal bond issue under the Centre's urban financing push. "The amount was kept in a fixed deposit, and we will have to return it next year," she said.

When asked whether the move had resulted in losses for the civic body, Kalaskar said the corporation earned returns from the deposit. "We received interest income through the fixed deposit and also got a two per cent incentive from the central...