Here's a policy analysis report based on the provided text, structured as an *Amendment* to an existing policy regarding Relief Savings Bonds:
**Report: Analysis of RBI Master Directions on Relief Savings Bonds (July 2, 2018)**
**1. Executive Summary:**
This report analyzes the updated Master Directions on Relief Savings Bonds issued by the Reserve Bank of India (RBI) on July 2, 2018. These directions consolidate previous instructions up to June 30, 2018, aiming to provide a single, updated reference point for all operative rules and regulations concerning Relief Savings Bonds. The key changes relate to broker enrollment/delisting, brokerage payment procedures, and nomination facilities for Bond Ledger Accounts (BLA). The report details these changes and their likely impact on Receiving Offices, brokers, and bondholders.
**2. Introduction:**
This report aims to provide a comprehensive overview of the updated Master Directions on Relief Savings Bonds issued by the Reserve Bank of India on July 2, 2018, based solely on the information provided in the document. It focuses on the changes and clarifications made to the existing regulations governing these bonds.
**3. Policy Overview:**
* This document amends the existing rules and regulations pertaining to Relief Savings Bonds.
* **Core Objective(s):** Based on the text, the core objectives are:
* To consolidate and update all current operative instructions regarding Relief Savings Bonds in one place.
* To streamline procedures related to broker enrollment, brokerage payments, and nomination facilities.
* To improve customer service related to brokerage claims.
**4. Background and Rationale:**
The consolidation of instructions into Master Directions suggests an effort by the RBI to simplify and clarify the regulatory landscape for Relief Savings Bonds. The specific amendments related to brokers and nomination facilities likely aim to address operational inefficiencies and provide greater clarity and flexibility for bondholders. The emphasis on expeditious brokerage payments indicates a desire to improve the experience for brokers involved in the bond sales process. The update likely addresses concerns or ambiguities that have arisen in the application of the original policy, as reflected in the various circulars listed in the Appendix.
**5. Key Provisions / Changes:**
The Master Directions introduce changes and clarifications in three main areas:
* **A. Appointment/Delisting of Brokers:**
* **Change:** Formalizes procedures for enrollment/registration of brokers by Receiving Offices. It also clarifies that Receiving Offices are solely responsible for the activities of sub-agents they appoint, and RBI's name cannot be used by such agents/brokers. A process to delist dormant brokers is introduced.
* **Original Policy Changed (Inferred):** This likely formalizes and standardizes practices that were previously less clearly defined. It also addresses a potential misuse of RBI's name by sub-agents.
* **Effect:** Standardized broker enrollment, reduced risk of misrepresentation, and a mechanism to remove inactive brokers.
* **B. Payment Rates of Brokerage for Savings Bonds:**
* **Change:** Reinforces the brokerage rate of 0.50% (fifty paise per ₹100) for registered brokers on Bond Ledger Account (BLA) applications. It also specifies that no TDS is required on brokerage payments. It reinforces the need to settle brokerage claims expeditiously (within 30 days) and suggests paying brokerage monthly via ECS. Also states how reimbursement is handled through CAS Nagpur.
* **Original Policy Changed (Inferred):** Formalizing no TDS, and the time to settle brokerage payments may have been added to address delays or inconsistencies in payments. The payment via ECS is encouraged, which may be a new option, and clarification on CAS Nagpur.
* **Effect:** Faster and more efficient brokerage payments, increased transparency and standardization.
* **C. Nomination Facility for Relief Savings Bonds:**
* **Change:** Clarifies the nomination process for Relief Savings Bonds held in BLA form, including the eligibility of nominees, the process for varying or canceling nominations, and the appointment of guardians for minor nominees. Investors can make separate nominations for each investment in a BLA. Receiving offices must acknowledge nominations. NRI nomination is permissible for 8% Savings Taxable Bonds, 2003, but *not* for 7.75% Savings Taxable Bonds, 2018. Details exceptions when nomination is not permissible.
* **Original Policy Changed (Inferred):** May formalize the process of how nominees are handled, and clarifying that it is not available to all bond types.
* **Effect:** Greater clarity and flexibility for bondholders in nominating beneficiaries, specific bond types may have limitations.
**6. Target Audience and Stakeholders:**
The primary target audience and stakeholders are:
* **Receiving Offices:** The instructions are directed at various banks and financial institutions acting as Receiving Offices for Relief Savings Bonds (State Bank of India, Nationalized Banks, Axis Bank, ICICI Bank, HDFC Bank, Stock Holding Corporation of India Ltd.).
* **Brokers:** The updated directions directly affect brokers involved in selling Relief Savings Bonds.
* **Bondholders (Investors):** The changes regarding nomination facilities directly impact existing and potential investors in Relief Savings Bonds.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** The Reserve Bank of India (RBI) is the responsible agency. Receiving Offices are responsible for implementing the directions.
* **Timelines/Procedures:** The text specifies a 30-day timeframe for settling brokerage claims. It also mentions that Receiving Offices should arrange to pay the brokerage to the agents, on a monthly basis by credit to their accounts through ECS. Reimbursement of brokerage claims has been centralized at CAS Nagpur.
* Implementation of the change lies with the receiving offices.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these changes are:
* **Improved Efficiency:** Streamlined broker enrollment and brokerage payment procedures should reduce administrative burdens and improve efficiency for Receiving Offices.
* **Increased Transparency:** Clearer rules regarding sub-agents and nomination facilities enhance transparency and reduce the potential for misrepresentation or disputes.
* **Better Customer Service:** Faster brokerage payments and greater flexibility in nomination enhance the experience for brokers and bondholders, respectively.
* **Reduced Risk:** The formalization of rules regarding brokers likely aims to reduce the risks associated with agent activities and maintain the integrity of the Relief Savings Bond scheme.
**9. Conclusion:**
The updated Master Directions on Relief Savings Bonds issued on July 2, 2018, represent a consolidation and clarification of existing regulations. The changes related to broker management, brokerage payments, and nomination facilities aim to improve efficiency, transparency, and customer service. These changes are significant for Receiving Offices, brokers, and bondholders, and demonstrate the RBI's commitment to maintaining a well-regulated and efficient market for Relief Savings Bonds.
Key Entities Referenced
RESERVE BANK OF INDIA: The central bank of India, the issuer of the policy document.
RBI: Abbreviation for Reserve Bank of India
RBIIDMD20181961: Document identifier for the Reserve Bank of India document.
IDMD.CDD No.2113.01.299201819: Specific document reference number.
July 2, 2018: Date of the policy document.
The Chairman: Addressee of the letter, referring to the Chairman of various banks.
Managing Director: Addressee of the letter, referring to the Managing Director of various banks.
Head Office: Addressee of the letter, referring to the Head Office of Government Accounts Department
Government Accounts Department: Government department to whom the letter is addressed
State Bank of India: A specific bank to whom the letter is addressed.
Nationalized banks: Category of banks to whom the letter is addressed.
Punjab and Sind Bank: A bank excluded from those being addressed.
Andhra Bank: A specific bank to whom the letter is addressed.
Axis Bank Ltd.: A specific bank to whom the letter is addressed.
ICICI Bank Ltd.: A specific bank to whom the letter is addressed.
HDFC Bank Ltd.: A specific bank to whom the letter is addressed.
Stock Holding Corporation of India Ltd.: A specific entity to whom the letter is addressed.
SHCIL: Abbreviation for Stock Holding Corporation of India Ltd.
Master Directions on ReliefSavings Bonds: The subject of the policy document; regulations regarding ReliefSavings Bonds.
June 30, 2018: Date up to which instructions have been updated in the Master Directions.
RBI website: The website of the Reserve Bank of India where the directions have been placed.
https:rbi.org.in: URL for the RBI website
A. Mangalagiri: Chief General Manager at RBI signing the letter.
Chief General Manager: Designation of the signatory
Internal Debt Management Department: Department at RBI responsible for the document.
Central Office: Location of the Internal Debt Management Department.
23rd Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai400 001, India: Address of the Central Office.
Mumbai400 001: Location of the RBI office.
Savings Bonds: Refers to ReliefSavings Bonds
Section 194 H of the Income Tax Act, 1961: Relevant section of the Income Tax Act concerning TDS on brokerage.
CAS Nagpur: Centralised Accounting Section of RBI where reimbursement of brokerage claims is processed.
July 01, 2002: Date from which reimbursement of brokerage claims has been centralized at CAS Nagpur.
ECS: Electronic Clearing Service, a method for paying brokerage to agents.
Appendix IV: Statement to be submitted to settle the balance 10% of brokerage.
Bond Ledger Account: Form in which Savings Bonds are held, also referred to as BLA.
BLA: Abbreviation for Bond Ledger Account
Non-resident Indian: An individual who is a citizen of India but does not reside in India
NRI: Abbreviation for Non-resident Indian
FEMA 1999: Foreign Exchange Management Act, 1999
8 Savings Taxable Bonds, 2003: Type of bond where nomination facility is available to NRIs.
7.75 Savings Taxable Bonds, 2018 Scheme: Type of bond where nomination facility is not available to NRIs.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
__________________________ __________________________
www.rbi.org.in
RBI/IDMD/2018-19/61
IDMD.CDD No.21/13.01.299/2018-19 July 2, 2018
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,
Master Directions on Relief/Savings Bonds
The rules and regulations applicable to Relief/Savings Bonds have been updated
with instructions issued up to June 30, 2018 in the Master Directions on
Relief/Savings Bonds. The directions facilitate availability of all the current operative
instructions on the above subject at one place and will be updated suitably and
simultaneously whenever there is a change in the rules/regulations or there is a
change in the policy. These directions have been placed on RBI website
https://rbi.org.in
Yours faithfully,
(A. Mangalagiri)
Chief General Manager
Encl. 1
आंतरिक ऋण प्रबंध विभाग, केंद्रीय कार्यालय, 23वीं मंजिल, केंद्रीय कार्यालय भवन, शहीद भगत सिंह मार्ग, फोर्ट , 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.MASTER DIRECTIONS - RELIEF/SAVINGS BONDS
Index
Sr. No Contents Page
A Appointment / delisting of brokers 1
B Payment & rates of brokerage for Savings Bonds 1
C Nomination facility for Relief/Savings Bonds 2
Appendix 4MASTER DIRECTIONS - RELIEF/SAVINGS BONDS
A) APPOINTMENT / DELISTING OF BROKERS
1. Procedure for enrollment / registration of brokers
Receiving Offices 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 Receiving
Offices. The Receiving Office 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 Receiving Offices
It has come to our notice that some Receiving Offices 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 Bond business. We advise that in cases where
Receiving Offices engage the services of other banks/institutions as a broker or
agent, the Receiving Office which have appointed them are solely responsible for
their activities as an agents/brokers. RBI's name should not be used by such
agents/brokers.
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 ` 0.50 (Fifty paise only) per ` 100/- will be paid to
brokers registered/enrolled with the Receiving Offices on applications tendered for
2investment in the bonds in the form of Bond Ledger Account (BLA) at Receiving
Offices 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 Receiving Office 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. Receiving Offices are to settle the brokerage claims expeditiously, and in any
case, not later than 30 days from the date of subscription.
b. Receiving Offices are advised to first settle the brokerage claims and
thereafter seek reimbursement from RBI.
c. As a measure towards improvement in customer service, Receiving Offices
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 Receiving Offices, 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 held in the
form of a BLA 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 branch of the Receiving Office where the BLA is maintained
and shall be effective from the date of such registration. Nomination will also stand
cancelled if the holder(s) transfers the bonds to another party (wherever
applicable).The transferee will have to register a new nominee.
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. Receiving Offices to issue ‘Acknowledgement of Nomination.'
8. In case of 8 % Savings (Taxable) Bonds, 2003 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 framed under FEMA 1999 as applicable to NRIs. The
nomination facilities to NRIs is not available in case of 7.75% Savings (Taxable)
Bonds, 2018 Scheme (currently the only scheme open for subscription).
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
4APPENDIX
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
xix) IDMD.CDD.No.1671/13.01.299/2017-18 dated January 03, 2018
xx) IDMD.CDD.No.1728/13.01.299/2017-18 dated January 08, 2018.
(In case detailed clarifications are required on specific issues, the circulars indicated above
may please be referred to)