Reserve Bank of India
RBI2015-16/290
IDMD.CDD.No.1573/14.04.050/2015-16
January 14, 2016
The
Chairman& Managing Director
All
Scheduled Commercial Banks,
(Excluding
RRBs)
Stock
Holding Corporation of India Ltd.(SHCIL)
Sovereign
Gold Bonds 2015-16
Government
of India has vide its Notification F.No. 4(19)-W&M/2014 dated January 14,
2016 announced that the Sovereign Gold Bonds, 2016 (“the Bonds”) will be open
for subscription from January 18, 2016 to January 22, 2016. The Government of
India may, with prior notice, close the Scheme before the specified period. The
terms and conditions of the issuance of the Bonds shall be as follows:
1. Eligibility for
Investment:
The
Bonds under this Scheme may be held by a person resident in India, being an
individual, in his capacity as such individual, or on behalf of minor child, or
jointly with any other individual. The bond may also be held by a Trust,
Charitable Institution and University. “Person resident in India” is defined
under section 2(v) read with section 2(u) of the Foreign Exchange Management
Act, 1999
2. Form of Security
The
Bonds shall be issued in the form of Government of India Stock in accordance
with section 3 of the Government Securities Act, 2006. The investors will be
issued a Holding Certificate (Form C). The Bonds shall be eligible for
conversion into de-mat form.
3. Date of Issue
Date
of issuance shall be February 08, 2016.
4. Denomination
The
Bonds shall be denominated in units of one gram of gold and multiples thereof.
Minimum investment in the Bonds shall be two grams with a maximum limit of
subscription of five hundred grams per person per fiscal year (April – March).
5. Issue Price
Price
of the Bonds shall be fixed in Indian Rupees on the basis of the previous
week’s (Monday – Friday) simple average closing price for gold of 999 purity,
published by the India Bullion and Jewellers Association Ltd. (IBJA).
6. Interest
The
Bonds shall bear interest at the rate of 2.75 percent (fixed rate) per annum on
the amount of initial investment. Interest shall be paid in half-yearly rests
and the last interest shall be payable on maturity along with the principal.
7. Receiving Offices
Scheduled
commercial banks (excluding RRBs), designated Post Offices (as may be notified)
and Stock Holding Corporation of India Ltd (SHCIL) are authorized to receive
applications for the Bonds either directly or through agents.
8. Payment Options
Payment
shall be accepted in Indian Rupees through Cash up to a maximum of Rs.20,000/-
or Demand Drafts or Cheque or Electronic banking. Where payment is made through
cheque or demand draft, the same shall be drawn in favour of receiving office.
9. Redemption
The
Bonds shall be repayable on the expiration of eight years from February 8,
2016, the date of issue of Gold bonds. Pre-mature redemption of the Bond is
permitted from fifth year of the date of issue on the interest payment dates.
The
redemption price shall be fixed in Indian Rupees on the basis of the previous
week’s (Monday – Friday) simple average closing price for gold of 999 purity,
published by IBJA.
10. Repayment
The
receiving office shall inform the investor of the date of maturity of the Bond
one month before its maturity.
11. Eligibility for
Statutory Liquidity Ratio (SLR)
The
investment in the Bonds shall be eligible for SLR.
12. Loan against Bonds
The
Bonds may be used as collateral for loans. The Loan to Value ratio will be as
applicable to ordinary gold loan mandated by the RBI from time to time. The
lien on the Bonds shall be marked in the depository by the authorized banks.
13. Tax Treatment
Interest
on the Bonds shall be taxable as per the provisions of the Income-tax Act,
1961. Capital gains tax treatment will be the same as that for physical gold.
14. Applications
Subscription
for the Bonds may be made in the prescribed application form (Form ‘A’) or in
any other form as near as thereto stating clearly the grams of gold and the
full name and address of the applicant. The receiving office shall issue an
acknowledgment receipt in Form ‘B’ to the applicant.
15. Nomination
Nomination
and its cancellation shall be made in Form ‘D’ and Form ‘E’, respectively, in
accordance with the provisions of the Government Securities Act, 2006 (38 of
2006) and the Government Securities Regulations, 2007, published in part III,
Section 4 of the Gazette of India dated December 1, 2007.
16. Transferability
The
Bonds shall be transferable by execution of an Instrument of transfer as in
Form ‘F’, in accordance with the provisions of the Government Securities Act,
2006 (38 of 2006) and the Government Securities Regulations, 2007, published in
part III, Section 4 of the Gazette of India dated December 1, 2007.
17. Tradability of
bonds
The
Bonds shall be eligible for trading from such date as may be notified by the
Reserve Bank of India.
18. Commission for
distribution
Commission
for distribution shall be paid at the rate of rupee one per hundred of the
total subscription received by the receiving offices on the applications
received and receiving offices shall share at least 50% of the commission so
received with the agents or sub-agents for the business procured through them.
19.
All other terms and conditions specified in the notification of Government of
India in the Ministry of Finance (Department of Economic Affairs) vide number
F. No.4(13) W&M/2008, dated 8th October 2008 shall apply to the Bonds.
Yours faithfully,
(Arun Bhagoliwal)
Deputy General Manager
Encls.: As above.
