Executive Summary:
This document from the Reserve Bank of India (RBI) announces the Sovereign Gold Bond (SGB) Scheme 2019-20 Series V-X, following the Government of India's notification. It outlines the terms and conditions for the issuance of these bonds, including eligibility, denomination, pricing, subscription periods, interest rates, and redemption rules. The subscription periods for the various tranches (Series V to X) are specified, spanning from October 2019 to March 2020.
Key Points / Main Content:
Eligibility and Form:
* Bonds can be held by resident individuals, trusts, HUFs, charitable institutions, and universities as defined by the Foreign Exchange Management Act, 1999.
* Bonds are issued as Government of India Stock in Holding Certificate Form C and are eligible for dematerialization.
Denomination, Limits, and Pricing:
* Denominated in units of one gram of gold, with a minimum investment of one gram.
* Maximum subscription limits per fiscal year: 4 kg for individuals, 4 kg for HUFs, and 20 kg for trusts and similar entities.
* Issue price is 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.
* A discount of Rs 50 per gram is offered to investors applying online and paying through digital modes.
Subscription and Issuance Calendar:
* Specifies subscription and issuance dates for Series V to X, occurring between October 2019 and March 2020.
* Tranche | Subscription Date | Issuance Date
* Series V | October 07-11, 2019 | October 15, 2019
* Series VI | October 21-25, 2019 | October 30, 2019
* Series VII | December 02-06, 2019 | December 10, 2019
* Series VIII | January 13-17, 2020 | January 21, 2020
* Series IX | February 03-07, 2020 | February 11, 2020
* Series X | March 02-06, 2020 | March 11, 2020
Interest and Redemption:
* Bonds bear a fixed interest rate of 2.50 percent per annum, paid semi-annually.
* Repayable after eight years from the issue date, with premature redemption 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) for the previous 3 working days, published by the India Bullion and Jewellers Association Limited.
Other Provisions:
* Scheduled Commercial Banks (excluding RRBs, Small Finance Banks, and Payment Banks), designated Post Offices, SHCIL, and recognized stock exchanges are authorized to receive applications.
* Payment can be made in Indian Rupees via cash (up to ₹20,000), Demand Draft, Cheque, or Electronic banking.
* Bonds can be used as collateral for loans, subject to RBI's Loan to Value ratio for gold loans.
* Interest is taxable, but capital gains tax on redemption for individuals is exempted. Indexation benefits apply to long-term capital gains on bond transfers.
* Nomination and transfer follow Government Securities Act, 2006, and Government Securities Regulations, 2007.
* Commission of Rupee one per hundred of the total subscription received will be paid to receiving offices.
Impact Analysis:
Banks and Financial Institutions:
* Impact: Can accept applications, mobilize subscriptions, and offer loans against these bonds as collateral. Bonds acquired through lien/hypothecation/pledge can count towards Statutory Liquidity Ratio (SLR).
* Action Required: Ensure compliance with guidelines for accepting applications, disbursing commissions, and marking liens on bonds in the Ekuber portal.
Investors:
* Impact: Opportunity to invest in gold in dematerialized form, earn interest, and avail tax benefits.
* Action Required: Apply for the bonds during the subscription periods, provide PAN details, and choose payment options.
Receiving Offices (including Post Offices, SHCIL, and Stock Exchanges):
* Impact: Authorized to receive applications for the bonds and are eligible for commission on subscriptions mobilized.
* Action Required: Accept applications, issue acknowledgment receipts, and share commissions with agents/sub-agents.
RBI Depository:
* Impact: Responsible for informing investors about the maturity date of the bonds.
* Action Required: Notify investors one month before the bond's maturity.
Key Entities Referenced
Sovereign Gold Bond Scheme 2019-20 Series V-X: A Government of India scheme offering investment in gold bonds, with multiple tranches issued during the fiscal year 2019-20.
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Government of India: The Union Government of India.
Scheduled Commercial Banks: Banks in India that are listed in the Second Schedule to the Reserve Bank of India Act, 1934.
Stock Holding Corporation of India Ltd. (SHCIL): An Indian financial services provider and depository participant.
National Stock Exchange of India Ltd.: A leading stock exchange in India, providing a platform for trading in equities, derivatives, and other financial instruments.
Bombay Stock Exchange Ltd.: One of the oldest stock exchanges in Asia, located in Mumbai, Maharashtra, India.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
____________________ ______________________
www.rbi.org.in
RBI/2019-20/73
IDMD.CDD.No.890/14.04.050/2019-20 September 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 V/VI/VII/VIII/IX/X
Government of India has vide its Notification F.No.4(7)-B W&M/2019 dated September
30, 2019 announced the Sovereign Gold Bond Scheme 2019-20 Series
V/VI/VII/VIII/IX/X. Under the scheme there will be a distinct series (starting from Series
V) for every tranche which will be indicated on the Bond issued to the investor. The
Government of India (GoI) may, with prior notice, close the Scheme before the specified
period. The terms and conditions of the issuance of the Bonds shall be as indicated in
the GoI notification. However, we wish to draw your attention in particular to the
following:
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
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 orHolding Certificate (Form C). The Bonds shall be eligible for conversion into de-mat
form.
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 Rs 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 V October 07-11, 2019 October 15, 2019
2 2019-20 Series VI October 21-25, 2019 October 30, 2019
3 2019-20 Series VII December 02–06, 2019 December 10, 2019
4 2019-20 Series VIII January 13-17, 2020 January 21, 2020
5 2019-20 Series IX February 03-07, 2020 February 11, 2020
6 2019-20 Series X March 02-06, 2020 March 11, 2020
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 appropriately in E-kuber portal by the Receiving Offices
/Depository. 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
investor provided that:
i. the Non-Resident investor shall need to hold the security till early redemption or
Page | 4till 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 and they 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.891/14.04.050/2019-20 dated September 30, 2019.
Yours faithfully,
Sd/
(Raksha Mishra)
General Manager
Encls.: As above.
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