Executive Summary:
This document contains the Reserve Bank of India's (RBI) Master Directions on ReliefSavings Bonds, updated with instructions issued up to June 30, 2017. It consolidates current operative instructions regarding ReliefSavings Bonds. The directions are available on the RBI website and will be updated as rules or policies change.
Key Points / Main Content:
Broker Enrollment/Delisting:
Agency banks should have a simple procedure for broker registration, assigning a code number for brokerage claims.
Agency banks are responsible for the activities of other banks/institutions they engage as brokers/agents and cannot use RBI's name in publicity.
Dormant brokers (e.g., inactive for 2 years) may be delisted after due notice.
Brokerage Payment:
Brokerage is paid at a rate of ₹1 per ₹100 on applications for Bond Ledger Accounts (BLA) tendered at designated branches.
No brokerage is payable if the broker is also an investor/applicant.
No Tax Deduction at Source (TDS) is required on brokerage payments.
Brokerage claims must be settled by agency banks within 30 days of subscription and reimbursed by RBI.
Agency banks may pay brokerage monthly via ECS after obtaining mandates.
Reimbursement of brokerage claims is centralized at CAS Nagpur, with 90% paid on the 3rd working day of the following month and the balance 10% settled upon submission of Appendix IV.
Nomination Facility:
Holders of ReliefSavings Bonds (excluding promissory notes/bearer bonds) can nominate individuals to be entitled to the bond in the event of the holder's death, provided the nominee is competent to hold a similar bond.
Nominations must be made before the bond's maturity.
Surviving nominees are entitled to the bond and payment if one or more nominees die.
Nominations can be varied or cancelled by making a fresh nomination and informing the designated branch in writing.
If the nominee is a minor, a person can be appointed to receive proceeds on their behalf.
Separate nominations can be made for each BLA investment, subject to certain conditions.
Agency banks must issue an Acknowledgment of Nomination.
For 8% Savings Taxable Bonds, 2003, NRIs can be nominated, with interest and maturity value remittance governed by NRI regulations.
No nomination is allowed when the BLA is held by an adult for a minor or when the holder has no beneficial interest.
A nomination is automatically cancelled upon application for substitution/cancellation or transfer of the Certificate.
Impact Analysis:
Agency Banks:
Impact: Must adhere to the updated procedures for broker enrollment/delisting, brokerage payments, and nomination facilities for ReliefSavings Bonds.
Action Required: Implement the updated guidelines, ensure compliance, and inform relevant staff about the changes.
Brokers:
Impact: Subject to the enrollment/delisting procedures and brokerage payment rates outlined in the document.
Action Required: Ensure compliance with agency bank requirements for registration and submit claims in a timely manner.
Investors/Bond Holders:
Impact: Benefit from the updated nomination facility guidelines and streamlined brokerage payment processes.
Action Required: Review and update nominations as needed, and be aware of the brokerage payment procedures.
Key Entities Referenced
Reserve Bank of India: The central bank of India, which issued the master directions.
State Bank of India: A major public sector bank in India, listed among the banks to which the notification is addressed.
Andhra Bank: A bank in India, listed among the banks to which the notification is addressed.
Axis Bank Ltd: A private sector bank in India, listed among the banks to which the notification is addressed.
ICICI Bank Ltd: A private sector bank in India, listed among the banks to which the notification is addressed.
HDFC Bank Ltd: A private sector bank in India, listed among the banks to which the notification is addressed.
ReliefSavings Bonds: The primary subject of the master directions, concerning rules and regulations for these bonds.
Income Tax Act, 1961: An Indian law that is referenced in the context of tax deduction at source (TDS) on brokerage payments.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
_____________ _________ __________________________
www.rbi.org.in
RBI/IDMD/2017-18/54
IDMD.CDD No.8/13.01.299/2017-18 July 1, 2017
The Chairman / Managing Director
Head Office (Government Accounts Department)
State Bank of India
All Nationalized banks
(Excluding Punjab and Sind Bank & Andhra Bank)
Axis Bank Ltd./ICICI Bank Ltd./HDFC Bank Ltd./
Stock Holding Corporation of India Ltd. (SHCIL)
Dear Sir/Madam,
8
Master Directions on Relief/Savings Bonds
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The rules and regulations applicable to Relief/Savings Bonds have been updated
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with instructions issued up to June 30, 2017 0in the Master Directions on
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Relief/Savings Bonds. The directions facilitate alvailability of all the current operative
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instructions on the above subject at one place and will be updated suitably and
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simultaneously whenever there is a cheange in the rules/regulations or there is a
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change in the policy. These Directions have been placed on RBI website
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Yours faithfully,
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(A. Mangalagiri)
Chief General Manager
Encl. 1
आंत�रक ऋण �बंध िवभाग, क��ीय कायार्लय, 23व� मंिजल, क��ीय कायार्लय भवन, शहीद भगत �संह मागर्, फोटर् , मुंबई – 400 001, भारत
फोन : (022) 2266 1602-04, फैक्स : (022) 2264 4158, ई-मेल : cgmidmd@rbi.org.in
Internal Debt Management Department, Central Office, 23rd Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai-400 001, India
Telephone : 022 2266 1602-04, Fax : 022 2264 4158, Email : cgmidmd@rbi.org.in
िहन्दी आसान ह,ै इसका �योग बढ़ाइए।
चेतावनी : �रज़वर् ब�क �ारा ईमेल, डाक, एसएमएस या फोन काल के ज�रये �कसी क� भी �ि�गत जानकारी जैसे ब�क खाते का ब्यौरा, पासवडर् आ�द नह� मांगी जाती है।
यह धन रखने या देने का �स्ताव भी नह� करता ह।ै ऐसे �स्ताव� का �कसी भी तरीके से जवाब मत दीिजये।
Caution: RBI never sends emails, SMSs or makes calls asking for personal information like bank account details, passwords, etc. It never keeps or
offers funds to anyone. Please do not respond in any manner to such offers.ii
MASTER DIRECTIONS - RELIEF/SAVINGS BONDS
Index
Sr. No Contents Page
A Appointment / delisting of brokers by Agency banks 1
B Payment & rates of brokerage for savings bonds by Agency Banks 1
C Nomination facility for Relief/Savings Bond 2
Appendix 4MASTER DIRECTIONS - RELIEF/SAVINGS BONDS
A) APPOINTMENT / DELISTING OF BROKERS
1. Procedure for enrollment / registration of brokers
Agency banks may follow a simple procedure for enrolment/registration of brokers. The
broker seeking enrolment/registration may submit the request for registration on their
business letterhead together with business data to the agency banks. The agency
banks should allot a code number to the broker which should be quoted by the broker
on all applications tendered at the Receiving offices for claiming brokerage.
2. Appointment of sub-agents by Agency banks
It has come to our notice that some banks designated/authorized by Reserve Bank of
India (RBI) have engaged the services of other banks as brokers/agents for receiving
applications and the latter are using the name of RBI in their publicity material and
billboards stating that RBI has appointed them as brokers for Relief/Savings bonds
business. We advise that in cases where authorised banks engage the services of
other banks/institutions as a broker or agent, the agency banks who have appointed
them are solely responsible for their activities as an agent/broker. RBI's name should
not be used by such banks.
3. Delisting of brokers
The names of the dormant brokers, who have been dormant for say 2 years, may be
delisted after giving a due notice if, no fresh business is forthcoming from these brokers.
B) PAYMENT & RATES OF BROKERAGE FOR SAVINGS BONDS
1. Rates of brokerage
a. Brokerage at the rate of ` 1.00 (Rupee One only) per ` 100/- will be paid to
brokers registered/enrolled with agency banks on applications tendered for2
investment in the bonds in the form of Bond Ledger Account (BLA) at designated
branches on behalf of their clients and bearing their stamp.
b. No brokerage is payable in case the broker is one of the investors/applicants.
2. No TDS on payment of brokerage
No tax is required to be deducted at source by the agency banks while making payment
of brokerage in respect of the Relief/Savings bonds business canvassed by brokers in
terms of Section 194 (H) of the Income Tax Act, 1961.
3. Brokerage claims
a. Agency banks are to settle the brokerage claims expeditiously, and in any
case, not later than 30 days from the date of subscription.
b. Agency banks are advised to first settle the brokerage claims and thereafter
seek reimbursement from RBI.
c. As a measure towards improvement in customer service, agency banks may
arrange to pay the brokerage to the agents, on a monthly basis by credit to their
accounts through ECS after obtaining requisite mandate from them.
d. Reimbursement of brokerage claims in respect of Relief/Savings bonds has
been centralized at CAS Nagpur from July 01, 2002, and it has been decided that
90% of the brokerage due to agencies, on the basis of funds remitted/reported to
CAS as at the close of business of the month, will be paid on the 3rd working day of
the succeeding month. The balance 10% is to be settled on submission of Appendix
IV statement.
C) NOMINATION FACILITY FOR RELIEF/SAVINGS BONDS
1. A sole holder or all the joint holders (investors) of a Relief/Savings bond other than in the
form of promissory note or bearer bond may nominate one or more persons who in the
event of death of the sole holder/all the joint holders, as the case may be, would be
entitled to the Relief/Savings bond and to the payment thereon, provided that the person
or each of the persons nominated is himself/herself competent to hold a similar bond.
2. The nomination should be made before maturity of the bond.
33. When nomination has been made in favour of two or more nominees, in the event of the
death of either or any of them, the surviving nominee or nominees, as the case may be,
shall be entitled to the Relief/Savings bond and payment thereon.
4. A nomination made by the holder(s) of a Relief/Savings bond may be varied or cancelled
by making a fresh nomination in the prescribed manner and intimating the same in
writing to the designated branch of the authorised public/private sector bank.
5. If the nominee is a minor, the holder(s) of the Relief/Savings bond may appoint any
person, not being a minor, to receive the proceeds of a Relief/Savings bond on behalf of
the nominee in the event of his/her/their death during the minority of the nominee.
6. The investor(s) can make separate nomination for each investment in a Bond Ledger
Account (BLA) (subject to 2 above).
7. Agency banks to issue ‘Acknowledgement of Nomination.'
8. In case of 8% Savings (Taxable) Bonds, 2003 (currently the only scheme open for
subscription) the sole holder or all the joint holders can also nominate a Non-resident
Indian (NRI) as his/her/their nominee(s) and remittance of interest payment and/or
maturity value, as the case may be, will be governed by the regulations as applicable to
NRIs.
Exceptions – No nomination is permissible in the following cases
(a) When the BLA is held by an adult on behalf of a minor;
(b) When the holder has no beneficial interest in the BLA but holds it in an official or
fiduciary capacity.
Cancellation of Nomination - A nomination previously made will stand automatically
cancelled -
(a) If the holder(s) applies to the agency banks for substitution or cancellation of the
nomination and the substitution or cancellation is duly registered by the office;
(b) If the holder(s) transfers the Certificate to another party.4
APPENDIX
The various circulars/instructions issued by RBI based on which the above Master Direction
is prepared are listed below:
i) Memorandum of Procedure' for Relief bonds.
ii) CO.DT.13.01.201/4087/2000-01 dated February 16, 2001
iii) CO.DT.13.01.201/4854/2000-01 dated March 19, 2001
iv) CO.DT.13.01.298/H-3410/2003-04 dated December 20, 2003
v) CO.DT.13.01.299/H-3426/2003-04 dated December 20, 2003
vi) DGBA.CDD. No.H-2173/13.01.299/2008-09 dated September 2, 2008
vii) CO.DT./13.01.201/692/2000-01 dated August 9, 2000)
viii) CO.DT./13.01.251/5341/2001-02 dated January 4, 2000
ix) CO.DT./13.01.201/4890/1999-00 dated March 6, 2000
x) CO.DT./13.01.201/432/2000-01 dated July 25, 2000
xi) GOI Notification No.F.4 (1-W&M/99 dated July 21, 2000
xii) CO.DT./13.01.298/H-2411/2003-04 dated October 29, 2003
xiii) CO.DT./201/5900/2000-01 dated May 28, 2001
xiv) CO.DT./13.01.298/H-3660/2003-04 dated January 3, 2004
xv) CO.DT./13.01.201/4668/2000-01 dated March 8, 2001
xvi) CO.DT.13.01.298/H-4677/2002-03 dated May 23, 2003
xvii) CO.DT.13.01.272/11032/2001-02 dated June 25, 2002
xviii) CO.DT.13.01.272/H-2906 / 2002-03 dated February 26, 2003
(In case detailed clarifications are required on specific issues, the circulars indicated above
may please be referred to)