Executive Summary:
This document outlines operational guidelines for the Sovereign Gold Bond (SGB) Scheme 2019-20 Series VI-VII-VIII-IX-X, referencing notification F.No.47B/WM/2019 dated September 30, 2019, and RBI circular IDMD.CDD.No.890/14.04.050/2019-20 also dated September 30, 2019. It details application procedures, KYC requirements, and other operational aspects for receiving offices and investors. The guidelines are effective immediately.
Key Points / Main Content:
Application and Subscription:
* Application forms are received during normal banking hours during subscription weeks.
* Receiving Offices must ensure applications are complete and can facilitate online applications.
* Cancellation of applications is allowed until the closure of the issue (Friday of the subscription week); part cancellation is not permitted.
Joint Holding, Nomination, and Transfers:
* Multiple joint holders and nominees are permitted.
* Non-resident Indians (NRIs) can inherit bonds as nominees, but must hold them until early redemption or maturity; interest and maturity proceeds are non-repatriable.
KYC and Investor ID:
* PAN details are mandatory for all applications.
* Investors with existing SGB or IINSCC investments should use their unique Investor ID.
Lien Marking:
* Lien marking is governed by the Government Securities Act, 2006.
* Receiving Offices/Public Debt Offices of RBI mark liens for financing by agencies other than Receiving Offices.
Agency Arrangements and Commission:
* Receiving Offices can engage NBFCs, NSC agents, etc., to collect applications.
* Commission is Rupee one per hundred of total subscription, with Receiving Offices sharing at least 50% with agents/sub-agents.
Processing through RBI's e-Kuber System:
* SGBs are available for subscription through RBI's e-Kuber system via INFINET or Internet.
* Receiving Offices must ensure accurate data entry.
* Certificates of Holding are generated in the name of the principal holder and sent via email if an email address is provided.
Certificates of Holding:
* Holding Certificates should be printed in colour on A4 size 100 GSM paper.
Servicing and Follow-Up:
* Receiving Offices own the customer relationship, providing services like updating contact details and handling premature encashment requests.
* Applications must be preserved until the bonds mature and are repaid.
Tradability:
* Bonds are tradable on a date notified by the RBI.
* Only bonds held in demat form can be traded on stock exchanges.
Contact Details:
* Queries/clarifications can be emailed.
Reference Circular:
* Receiving offices should also refer to Circular IDMD.No.1569/14.04.050/2016-17 dated December 23, 2016, for procedural guidelines.
Impact Analysis:
Receiving Offices:
Impact: Must adhere to the new guidelines for application processing, KYC, agency arrangements, and e-Kuber system usage. They are responsible for customer service and maintaining records.
Action Required: Update systems and procedures to comply with the new guidelines, train staff, and establish agency arrangements if needed.
Investors:
Impact: Need to provide accurate information, including PAN details and existing Investor ID (if applicable). They can now apply online (if Receiving Offices facilitate this), nominate multiple individuals, and understand the conditions for NRI nominees.
Action Required: Ensure applications are complete, provide necessary KYC details, and be aware of the rules regarding joint holding, nomination, and transfer.
Agents/Sub-agents (NBFCs, NSC Agents, etc.):
Impact: Can earn commission by collecting application forms on behalf of Receiving Offices.
Action Required: Establish tie-ups with Receiving Offices and ensure compliance with the guidelines.
Key Entities Referenced
Sovereign Gold Bond SGB Scheme 201920 Series VVIVIIVIIIIXX: A scheme by the Government of India to allow investment in gold bonds.
Reserve Bank of India: The central bank of India, playing a key role in the issuance and regulation of Sovereign Gold Bonds.
Government Securities Act, 2006: The Act governing government securities, relevant for lien marking of the bonds.
Income Tax Department: The government department responsible for PAN details required for KYC.
Non resident Indian: An individual who is a resident outside India as per the Income Tax Act, 1961
National Stock Exchange of India Ltd.: A stock exchange where the bonds can be traded.
Bombay Stock Exchange Ltd.: A stock exchange where the bonds can be traded.
Public Debt Offices of RBI: Offices of the Reserve Bank of India involved in lien marking of the bonds.
RBI/2019-20/74
IDMD.CDD.No.891/14.04.050/2019-20 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 (SGB) Scheme 2019-20 - Series V/VI/VII/VIII/IX/X - Operational Guidelines
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This has reference to the GoI notification F.No.4(7)-B (W&M)/2019 dated September 30, 2019 and RBI
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circular IDMD.CDD.No.890/14.04.050/2019-20 dated September 30, 22019 on the Sovereign Gold Bonds.
FAQs in this regard have been placed on our website (www.rbi.org,.in). Operational guidelines with regard
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to this scheme are given below: 1
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1. Application p
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Application forms from investors will be received at brfanches during normal banking hours on the weeks of
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subscription. Receiving Offices need to ensure that the application is complete in all respects as incomplete
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applications are liable to be rejected. Relevant additional details may be obtained from the applicants,
where necessary. The Receiving Offices many make arrangements to enable the investors to apply online,
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in the interest of better customer service.
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2. Joint holding and nominationh
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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/her
name on account of he/she 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 details’ 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. The lien shall be marked by the Receiving
Offices/Public Debt Offices of RBI in case of financing by agencies other than the Receiving Offices.
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 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.
7. Processing through RBI’s e-Kuber system
Sovereign Gold Bonds will be available for subscription at the Receiving O0ffices through RBI’s e- Kuber
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system. The e-Kuber system can be accessed either through INFINET or Internet. The Receiving
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Offices need to enter the data or carry out bulk upload for the subscr2iptions received by them. They may
ensure accuracy of entry of data to prevent occurrence of a,ny inadvertent errors. An immediate
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confirmation will be provided to them for receipt of application1. In addition, a confirmation scroll will be
provided for file uploads to enable the Receiving Officesl to update their database. On the date of
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allotment, Certificates of Holding will be generated fopr all the subscriptions in the name of the
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sole/principal holder. The Receiving Offices can download the same and take printouts. The Certificates
of Holding will also be sent through e-mail to the infvestors who have provided their email address. The
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securities will be credited in their de-mat accounts by the depositories in due course subject to matching
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of particulars furnished in the application with the depositories’ records.
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8. Printing Certificates of Holding r
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Holding Certificate needs to be pirinted in colour on A4 size 100 GSM paper.
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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.12. Receiving offices may continue to be guided by Circular IDMD.No.1569/14.04.050/2016-17 dated
December 23, 2016 on Procedural Guidelines for Servicing the Sovereign Gold Bonds.
Yours faithfully,
Sd/-
(Raksha Mishra)
General Manager
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