Executive Summary:
This document provides operational guidelines for the Sovereign Gold Bond (SGB) Scheme 2018-19, referencing GoI notification F.No.4(22)/WM/2018 and RBI circular IDMD.CDD.No. 822/14.04.050/2018-19 dated October 08, 2018. It outlines procedures for application, KYC, cancellation, lien marking, agency arrangements, processing, certificate printing, servicing, tradability, and contact details. Receiving Offices must ensure complete applications and may offer online application options.
Key Points / Main Content:
Application:
* Application forms will be received at branches during normal banking hours on subscription weeks.
* Incomplete applications are liable to be rejected.
* Receiving Offices may enable online applications.
Joint Holding and Nomination:
* Multiple joint holders and nominees of first holder are permitted.
* Non-Resident Indians (NRIs) may inherit the security as a nominee, but must hold it until early redemption or maturity.
* Interest and maturity proceeds for NRIs are non-repatriable.
Know Your Customer (KYC):
* Every application must include the PAN Number issued by the Income Tax Department.
* Investor ID should be used for subsequent investments.
Cancellation:
* Cancellation is permitted until the closure of the issue (Friday of the subscription week).
* Part cancellation is not allowed.
Lien Marking:
* Lien marking follows the Government Securities Act, 2006.
Agency Arrangement:
* Receiving Offices may engage NBFCs, NSC agents, etc., to collect applications.
* Commission is Rupee one per hundred of the total subscription received.
* Receiving Offices shall share at least 50% of the commission with agents/sub-agents.
Processing through RBI's e-Kuber System:
* SGBs are available through RBI's e-Kuber system (INFINET or Internet).
* Receiving Offices must accurately enter or upload subscription data.
* Certificates of Holding are generated on the allotment date and sent via email (if provided).
* Securities will be credited to demat accounts after matching particulars.
Printing Certificates of Holding:
* Holding Certificates must be printed in color on A4 size 100 GSM paper.
Servicing and Follow Up:
* Receiving Offices are responsible for customer service (e.g., updating contact details, premature encashment).
* Applications must be preserved until the bonds mature and are repaid.
Tradability:
* Bonds are eligible for trading on a date notified by RBI.
* Only bonds held in demat form can be traded on stock exchanges.
Contact Details:
* Sovereign Gold Bond related queries: Please click here to send email.
* IT related queries: Please click here to send email.
Impact Analysis:
Receiving Offices (All Scheduled Commercial Banks Excluding RRBs, Designated Post Offices, SHCIL, NSE, BSE):
* Impact: Responsible for receiving applications, ensuring accuracy, enabling online applications, managing e-Kuber system, printing/distributing certificates, customer service, and agency arrangements.
* Action Required: Implement procedures for application processing, KYC verification, e-Kuber system utilization, certificate generation, customer service, and commission sharing with agents.
Investors:
* Impact: Must provide complete applications with PAN, follow KYC guidelines, and understand cancellation policies. Those with demat accounts can trade bonds on stock exchanges.
* Action Required: Ensure applications are complete, provide PAN, use Investor ID if applicable, and open a demat account if they intend to trade the bonds.
Agents/Sub-agents (NBFCs, NSC agents, etc.):
* Impact: Can collect application forms on behalf of Receiving Offices and are entitled to a share of the commission.
* Action Required: Procure business for SGB subscription and coordinate with Receiving Offices for commission distribution.
Key Entities Referenced
Sovereign Gold Bond Scheme 2018-19: A government scheme for investment in gold bonds.
Reserve Bank of India: The central bank of India, referred to as RBI.
Government of India: The Union Government of India, also referred to as GoI.
Scheduled Commercial Banks: Banks included in the second schedule of the RBI Act, excluding Regional Rural Banks.
Stock Holding Corporation of India Ltd.: A financial institution, abbreviated as SHCIL.
National Stock Exchange of India Ltd.: A stock exchange in India.
Bombay Stock Exchange Ltd.: A stock exchange located in Mumbai, Maharashtra.
Government Securities Act, 2006: The act governing government securities in India.
RBI/2018-19/58
IDMD.CDD.No.822/14.04.050/2018-19 October 08, 2018
The Chairman & Managing Director
All Scheduled Commercial Banks
(Excluding RRBs)
Designated Post Offices
Stock Holding Corporation of India ltd.(SHCIL)
National Stock Exchange of India Ltd. & Bombay Stock Exchange Ltd.
Dear Sir/Madam,
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Sovereign Gold Bond Scheme 2018-19, Operational Guidelines 0
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This has reference to the GoI notification F.No.4(22)-W&M/20,18 and RBI circular IDMD.CDD.No.
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/14.04.050/2018-19 dated October 08, 2018 on the Sove1reign Gold Bonds. FAQs in this regard
have been placed on our website (www.rbi.org.in). Operalt ional guidelines with regard to this scheme
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are given below: r
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1. Application
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Application forms from investors will be rece.ived at branches during normal banking hours on the
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weeks of subscription. Receiving Offices need to ensure that the application is complete in all
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respects as incomplete applications are liable to be rejected. Relevant additional details may be
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obtained from the applicants, where necessary. The Receiving Offices may make arrangements to
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enable the investors to apply online, in the interest of better customer service.
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2. Joint holding and nomination
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Multiple joint holders and nominees (of first holder) are permitted. Necessary details may be
obtained from the applicants as per practice. An individual Non - resident Indian may get the security
transferred in his name on account of his being a nominee of a deceased investor provided that:
i. the Non-Resident investor shall need to hold the security till early redemption or till maturity;
and
ii. the interest and maturity proceeds of the investment shall not be repatriable.
3. Know-Your-Customer (KYC) requirements
Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department
to the investor(s). It may be ascertained from the investor, if he/she has made a previous investment
in SGBs or IINSC-C and hence in possession of an Investor ID. If so, the investments may be made
under the unique Investor ID only.4. Cancellation
Cancellation of application is permitted till the closure of the issue, i.e. until Friday of the particular
week of subscription. Part cancellation of submitted request for purchase of gold bonds is not
permitted.
5. Lien marking
As the bonds are government securities, lien marking, etc. will be as per the extant legal provisions
of Government Securities Act, 2006 and rules framed there under.
6. Agency arrangement
Receiving Offices may engage NBFCs, NSC agents and others to collect application forms on their
behalf. Banks may enter into arrangements or tie-ups with such entities. Commission for distribution
shall be paid at the rate of Rupee one per hundred of the total subscription received by the receiving
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offices on the applications received and Receiving Offices shall2 share at least 50% of the
commission so received with the agents or sub-agents for the busine0ss procured through them.
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7. Processing through RBI’s e-Kuber system 1
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Sovereign Gold Bonds will be available for subscriptpion at the Receiving Offices through RBI’s e-
Kuber system. The e-Kuber system can be acceAssed either through INFINET or Internet. The
Receiving Offices need to enter the data or carrfy out bulk upload for the subscriptions received by
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them. They may ensure accuracy of entry of deata to prevent occurrence of any inadvertent errors.
An immediate confirmation will be providw.ed to them for receipt of application. In addition, a
confirmation scroll will be provided for fi le uploads to enable the Receiving Offices to update their
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database. On the date of allotment, Certificates of Holding will be generated for all the
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subscriptions in the name of the sole/principal holder. The Receiving Offices can download the
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same and take printouts. The rCertificates of Holding will also be sent through e-mail to the
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investors who have provided their email address. The securities will be credited in their de-mat
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accounts by the depositoriets, in due course, subject to matching of particulars furnished in the
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application with the deposWitories’ records.
8. Printing Certificates of Holding
Holding Certificate needs to be printed in colour on A4 size 100 GSM paper.
9. Servicing and follow up
Receiving Offices will “own” the customer and provide necessary services with regards to this bond
e.g. update contact details, receive requests for premature encashment, etc. Receiving Offices will
be required to preserve applications till the bonds are matured and are repaid.
10. Tradability
The Bonds shall be eligible for trading on a date notified by the Reserve Bank of India. (It may be
noted that only bonds held in demat form with depositories can be traded in stock exchanges).11. Contact details
Any queries/clarifications may be e-mailed to the following:
(a) Sovereign Gold Bond related: Please click here to send email.
(b) IT related: Please click here to send email.
Yours faithfully,
Sd/
(Shyni Sunil)
Deputy General Manager
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