Okay, I will analyze the provided policy text and generate the requested report, adhering strictly to the given instructions and focusing only on information directly available within the text.
**Report on Master Directions on Relief/Savings Bonds**
**1. Executive Summary:**
This report details the Reserve Bank of India's (RBI) Master Directions on Relief/Savings Bonds, updated as of June 30, 2017. This document consolidates and updates the regulations and instructions pertaining to these bonds. Key areas covered include the appointment and delisting of brokers, brokerage payment rates, and nomination facilities for bondholders. The directions aim to provide a single, updated source of information for stakeholders and to ensure efficient management and operation of the Relief/Savings Bonds scheme.
**2. Introduction:**
This report aims to provide a comprehensive overview of the RBI's Master Directions on Relief/Savings Bonds, as detailed in the document IDMD.CDD No.813/01.299/2017-18, dated July 1, 2017. The information presented is based solely on the provided policy text and intends to inform affected parties of the key provisions outlined within.
**3. Policy Overview:**
The document outlines the rules and regulations applicable to Relief/Savings Bonds, consolidating instructions issued up to June 30, 2017. The core objective, as stated in the text, is to facilitate the availability of all current operative instructions on the subject at one place. It also states that the directions will be updated whenever there is a change in the rules/regulations or a change in policy.
**4. Background and Rationale:**
The document acts as an update to previous instructions. Given the nature of it being an update, the likely reason for this specific amendment is to consolidate all previous instructions into one single document and to update these instructions with new instructions that were issued up until June 30, 2017. Furthermore, this single document can be updated in the future when changes are made.
**5. Key Provisions / Changes:**
This document acts as an update to previous instructions to Relief/Savings Bonds, and therefore outlines the updated rules, regulations and provisions related to Relief/Savings Bonds.
* **Appointment/Delisting of Brokers:** Agency banks are to follow a simple procedure for the enrolment/registration of brokers, assigning them a code number. If agency banks engage other banks or institutions as agents/brokers, the agency banks remain solely responsible for their agent's activities. The use of RBI's name by sub-agents is prohibited. Dormant brokers (inactive for two years) may be delisted after due notice.
* **Brokerage Payment Rates:** Brokerage is paid at a rate of ₹1.00 per ₹100 invested in Bond Ledger Accounts (BLA) tendered by registered brokers on behalf of their clients. No brokerage is payable if the broker is also an investor/applicant. Agency banks are not required to deduct tax at source (TDS) on brokerage payments. Brokerage claims should be settled expeditiously, not later than 30 days from the subscription date, and settled before seeking reimbursement from the RBI. Payment should be made by ECS on a monthly basis.
* **Nomination Facility:** A sole holder or joint holders of a Relief/Savings Bond (excluding promissory notes or bearer bonds) may nominate one or more persons to receive the bond in the event of their death, provided the nominees are competent to hold a similar bond. Nominations must be made before the bond's maturity. When there are multiple nominees, the surviving nominee(s) will be entitled to the bond. Nominations can be varied or cancelled by making a fresh nomination and informing the designated bank branch in writing. If a nominee is a minor, a person (not a minor) can be appointed to receive the proceeds on their behalf. Separate nominations can be made for each investment in a BLA. Agency banks are to issue an acknowledgment of nomination. Non-Resident Indians (NRIs) can be nominated for 8% Savings (Taxable) Bonds, 2003. Nominations are not permissible when the BLA is held by an adult on behalf of a minor or when the holder has no beneficial interest in the BLA but holds it in an official or fiduciary capacity. A nomination is automatically cancelled if the holder applies for substitution or cancellation or if the certificate is transferred to another party.
**6. Target Audience and Stakeholders:**
The primary target audience includes:
* State Bank of India
* 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)
* Brokers registered/enrolled with agency banks
* Investors in Relief/Savings Bonds (including NRIs for specific bond types)
* Nominees of Relief/Savings Bonds
**7. Implementation Aspects (Inferred):**
* **Responsible Agency:** Reserve Bank of India (RBI) oversees the policy, with agency banks responsible for implementation.
* **Brokerage Claims:** Agency banks are required to settle brokerage claims within 30 days and seek reimbursement from RBI. Reimbursement of brokerage claims has been centralized at CAS Nagpur since July 1, 2002.
* **Nomination:** Agency banks are responsible for acknowledging nominations.
**8. Expected Outcomes / Impact of Changes:**
The intended outcomes of consolidating these directions include:
* Improved accessibility of information for all stakeholders.
* Streamlined procedures for brokerage payments.
* Clear guidelines for nomination facilities, promoting investor convenience.
* Enhanced efficiency in the management and operation of Relief/Savings Bonds.
**9. Conclusion:**
The RBI's Master Directions on Relief/Savings Bonds represent a consolidation and update of existing regulations, intended to provide clarity and efficiency for stakeholders involved in the scheme. By centralizing the operative instructions and addressing key areas such as broker management and nomination facilities, the directions aim to improve the overall functioning and accessibility of Relief/Savings Bonds.
Key Entities Referenced
RESERVE BANK OF INDIA: The central bank of India, the issuer of the notification.
RBIIDMD20171854: Reference number for the notification.
IDMD.CDD No.813.01.299201718: Another reference number for the notification.
July 1, 2017: Date of the notification.
The Chairman: Addressee title.
Managing Director: Addressee title.
Head Office: Addressee title.
Government Accounts Department: Addressee title.
State Bank of India: A recipient bank.
All Nationalized banks Excluding Punjab and Sind Bank: Category of recipient banks, excluding a specific bank.
Andhra Bank: A recipient bank.
Axis Bank Ltd: A recipient bank.
ICICI Bank Ltd: A recipient bank.
HDFC Bank Ltd: A recipient bank.
Stock Holding Corporation of India Ltd: A recipient organization.
SHCIL: Abbreviation for Stock Holding Corporation of India Ltd.
Master Directions on ReliefSavings Bonds: The subject of the notification; updated rules and regulations.
June 30, 2017: Date up to which instructions have been updated.
RBI website: Location where the directions have been placed.
A. Mangalagiri: Chief General Manager at RBI, the sender of the notification.
Internal Debt Management Department, Central Office, 23rd Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai400 001, India: Department and address of the RBI office.
CAS Nagpur: Centralised agency for reimbursement of brokerage claims.
Bond Ledger Account: Form of investment in the bonds, abbreviated as BLA.
BLA: Abbreviation for Bond Ledger Account
Section 194 H of the Income Tax Act, 1961: Relevant section of the Income Tax Act regarding TDS on brokerage.
Nonresident Indian: NRI definition as part of nomination rules.
NRI: Abbreviation for Nonresident Indian.
Savings Taxable Bonds, 2003: The only scheme currently open for subscription
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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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)