Executive Summary:
This document from the Reserve Bank of India details the terms and conditions for the Sovereign Gold Bond (SGB) Scheme 2019-20 Series I, II, III, and IV, as announced by the Government of India. It specifies eligibility, denomination, issue price, subscription periods, interest rate, receiving offices, and other relevant guidelines. The subscription periods for the four series are in June, July, August, and September 2019, respectively.
Key Points / Main Content:
* **Eligibility and Denomination:**
* Bonds can be held by resident individuals, Trusts, HUFs, Charitable Institutions, and Universities.
* Denominated in units of one gram of gold or multiples thereof.
* Minimum investment is one gram.
* Maximum subscription per fiscal year: 4 kg for individuals and HUFs, 20 kg for trusts and similar entities.
* **Issue and Subscription:**
* Nominal value based on the simple average of the closing gold price (999 purity) published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period.
* Online applicants paying through digital mode receive a discount of ₹50 per gram.
* Subscription periods for Series I, II, III, and IV are in June, July, August, and September 2019, respectively.
* **Interest and Redemption:**
* Interest rate is 2.50 percent fixed per annum, paid semi-annually.
* Bonds are repayable after eight years from the issue date.
* Premature redemption is permitted after the fifth year on the next interest payment date.
* Redemption price is based on the simple average of the closing gold price (999 purity) of the previous 3 working days, published by the India Bullion and Jewelers Association Limited.
* **Other Provisions:**
* Receiving offices include Scheduled Commercial Banks (excluding RRBs, Small Finance Banks, and Payment Banks), designated Post Offices, SHCIL, and recognized stock exchanges.
* Payment accepted via cash (up to ₹20,000), Demand Draft, Cheque, or Electronic banking.
* Bonds can be used as collateral for loans, subject to the lending bank/institution's decision.
* Interest on bonds is taxable; capital gains tax on redemption for individuals is exempt.
* Bonds are transferable and eligible for trading as notified by RBI.
* Commission for mobilizing subscription is Rupee one per hundred of the total subscription received.
Impact Analysis:
**Investors:**
* Impact: Opportunity to invest in gold in dematerialized form, earn interest, and potential capital appreciation.
* Action Required: Apply for the bonds during the subscription period through authorized receiving offices, provide PAN details, and choose payment method.
**Scheduled Commercial Banks (excluding RRBs, Small Finance Banks, and Payment Banks), Designated Post Offices, SHCIL, and Recognized Stock Exchanges:**
* Impact: Act as receiving offices for applications and play a role in mobilizing subscriptions.
* Action Required: Accept applications, issue acknowledgment receipts, and ensure compliance with the scheme's guidelines.
**Lending Banks/Institutions:**
* Impact: Bonds can be used as collateral for loans.
* Action Required: Assess the loan eligibility based on their internal policies and RBI guidelines, mark a lien on the bonds in the depository.
**Agents/Sub-agents:**
* Impact: Opportunity to earn commission for mobilizing subscriptions.
* Action Required: Procure business and receive at least 50% of the commission received by the receiving offices for the business procured through them.
Key Entities Referenced
Reserve Bank of India: The central bank of India, which issued the notification regarding the Sovereign Gold Bond Scheme.
Sovereign Gold Bond Scheme 2019-20 Series II-III-IV: A government scheme for investment in gold bonds, with multiple series issued during the fiscal year 2019-2020.
Government of India: The issuer of the Sovereign Gold Bonds.
Foreign Exchange Management Act, 1999: Indian legislation defining 'person resident in India' for eligibility in the Sovereign Gold Bond Scheme.
Government Securities Act, 2006: Indian legislation under which the Sovereign Gold Bonds are issued.
India Bullion and Jewellers Association Limited: An association that provides the reference gold price for the Sovereign Gold Bond Scheme.
National Stock Exchange of India Ltd: A stock exchange authorized to receive applications for the Sovereign Gold Bonds.
Bombay Stock Exchange Ltd: A stock exchange authorized to receive applications for the Sovereign Gold Bonds.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
____________________ ______________________
www.rbi.org.in
RBI/2018-19/192
IDMD.CDD.No.3392/14.04.050/2018-19 May 30, 2019
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,
Sovereign Gold Bond Scheme (SGB) 2019-20- Series I/II/III/IV
Government of India has vide its Notification F.No. 4(7)-W&M/2019 dated May 30, 2019
announced the Sovereign Gold Bond Scheme 2019-20- Series I/II/III/IV. Under the
scheme there will be a distinct series (starting from Series I) for every tranche which will
be indicated on the Bond issued to the investor. 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, HUFs, Charitable Institution and
University. “Person resident in India” is defined under clause (v) of section 2 of the
Foreign Exchange Management Act, 1999 (42 of 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.
आंत�रक ऋण �बंध िवभाग, क��ीय कायार्लय, क��ीय कायार्लय भवन , शहीद भगत�सहं मागर् 23 वी मंिजल, मुंबई – 400 001, भारत
फोन : (022) 2266 1602-04, फैक्स : (022) 22644158, 2270 5125, ई-मेल :cgmidmd@rbi.org.in
Internal Debt Management Department, Central Office, Central Office Building, 23rdFloor, ShahidBhagat Singh Marg,, Mumbai-400 001, India
Telephone:02222661602-04,Fax :( 022) 2264 4158, 2270 5125,Email :cgmidmd@rbi.org.in
िहन्दी आसान हइै सका �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 forpersonal 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.3. Date of Issue
The date of issuance shall be as per the details given in Para 7.
4. Denomination
The Bonds shall be denominated in units of one gram of gold or multiples thereof.
Minimum investment in the Bonds shall be one gram with a maximum limit of
subscription per fiscal year of 4 kg for individuals, 4 kg for Hindu Undivided Family
(HUF) and 20 kg for trusts and similar entities notified by the government from time to
time
provided that
i. in case of joint holding, the above limits shall be applicable to the first applicant
only;
ii. annual ceiling will include bonds subscribed under different tranches during
initial issuance by Government and those purchased from the secondary
market; and
iii. the ceiling on investment will not include the holdings as collateral by banks
and other Financial Institutions.
5. Issue Price
The nominal value of the Bonds shall be fixed in Indian Rupees fixed on the basis of
simple average of closing price of gold of 999 purity published by the India Bullion and
Jewellers Association Limited for the last 3 working days of the week preceding the
subscription period. The issue price of the Gold Bonds will be ` 50 per gram less
than the nominal value to those investors applying online and the payment against
the application is made through digital mode.
6. Period of subscription.-
The Subscription of the Gold Bonds under this Scheme shall be open as specified in
Section 7 below.
Provided that the Central Government may, with prior notice, close the Scheme at any
time before the period specified above
Page | 27. Calendar of Issuance.-
S.No. Tranche Date of Subscription Date of Issuance
1 2019-20 Series I June 03-07, 2019 June 11, 2019
2 2019-20 Series II July 08-12, 2019 July 16, 2019
3 2019-20 Series III August 05-09, 2019 August 14, 2019
4 2019-20 Series IV September 09-13, 2019 September 17, 2019
8. Interest
The Bonds shall bear interest from the date of issue at the rate of 2.50 percent (fixed
rate) per annum on the nominal value. Interest shall be paid in half-yearly rests
and the last interest shall be payable along with principal on maturity.
9. Receiving Offices
Scheduled Commercial Banks (excluding RRBs, Small Finance Banks and Payment
Banks), designated Post Offices (as may be notified), Stock Holding Corporation of
India Ltd (SHCIL) and recognized stock exchanges viz., National Stock Exchange of
India Limited and Bombay Stock Exchange Ltd. are authorized to receive applications
for the Bonds either directly or through agents.
10. Payment Options
Payment shall be accepted in Indian Rupees through cash up to a maximum of `
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 the Receiving
Office.
11. Redemption
i) The Bonds shall be repayable on the expiration of eight years from the date of
issue of the Bonds. Pre-mature redemption of the Bond is permitted after fifth year of
the date of issue of the Bonds and such repayments shall be made on the next interest
payment date.
ii) The redemption price shall be fixed in Indian Rupees and the redemption price
shall be based on simple average of closing price of gold of 999 purity of the previous 3
working days, published by the India Bullion and Jewelers Association Limited.
Page | 312. Repayment
RBI/depository shall inform the investor about the date of maturity of the Bond one
month before its maturity.
13. Eligibility for Statutory Liquidity Ratio (SLR)
Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge
alone shall be counted towards Statutory Liquidity Ratio.
14. 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. The loan against SGBs
would be subject to decision of the lending bank/institution, and cannot be inferred as a
matter of right by the SGB holder.
15. Tax Treatment
Interest on the Bonds shall be taxable as per the provisions of the Income-tax Act,
1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual
has been exempted. The indexation benefits will be provided to long term capital gains
arising to any person on transfer of bond.
16. 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. Every application must be accompanied by the
‘PAN details’ issued by the Income Tax Department to the investor(s). The Receiving
Office shall issue an acknowledgment receipt in Form ‘B’ to the applicant.
17. Nomination
Nomination of 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. An individual Non - resident Indian may get
the security transferred in his name on account of his being a nominee of a deceased
Page | 4investor 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.
18. Transferability
The Bonds issued in the form of Stock Certificate 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.
19. Tradability of bonds
The Bonds shall be eligible for trading from such date as may be notified by the
Reserve Bank of India.
20. Commission for mobilizing subscription
Commission for mobilizing subscription 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.
21. 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(2)
W&M/2018, dated 27th March 2018 shall apply to the Bonds.
22. Operational guidelines relating to Sovereign Gold Bonds are issued vide circular
IDMD.CDD.No.3391/14.04.050/2018-19 dated May 30, 2019.
Yours faithfully,
Sd/
(Raksha Mishra)
General Manager
Encls.: As above.
Page | 5