Executive Summary:
This circular from the Reserve Bank of India (RBI), dated February 23, 2017, provides operational guidelines for Sovereign Gold Bonds 2016-17 Series IV. It details procedures for application, KYC, interest payment, cancellation, and other aspects related to the scheme. The application period is from February 27, 2017, to March 03, 2017, and the allotment date is March 17, 2017.
Key Points / Main Content:
* **Application Process:**
* Application forms will be received at branches during normal banking hours from February 27, 2017, to March 03, 2017.
* Receiving Offices must ensure applications are complete; incomplete applications are liable for rejection.
* Online application facilities are encouraged.
* **Joint Holding and Nomination:**
* Multiple joint holders and nominees are permitted.
* **KYC Requirements:**
* KYC norms are the same as for physical gold purchases.
* Acceptable documents: Passport, PAN Card, Voter's Identity Card, Aadhaar card.
* For minors, the bank account number may also be considered valid for KYC verification.
* KYC will be done by the issuing banks/SHCIL offices/Post Offices/agents.
* **Interest on Application Money:**
* Interest at the prevailing savings bank rate will be paid from the date of realization of payment to the settlement date.
* Interest to be credited via electronic fund transfer if the applicant's bank account is not with the receiving bank.
* **Cancellation:**
* Cancellation of application is permitted until March 03, 2017.
* Part cancellation is not allowed.
* No interest is paid if the application is cancelled.
* **Lien Marking:**
* Lien marking will follow the Government Securities Act, 2006.
* **Agency Arrangement:**
* Scheduled Commercial Banks may engage NBFCs, NSC agents, etc., to collect applications.
* Commission: Rupee one per hundred of total subscription received.
* Receiving offices shall share at least 50% of the commission with the agents/sub-agents.
* **Processing through RBI's e-Kuber System:**
* Sovereign Gold Bonds available through scheduled commercial banks and designated post offices via RBI's e-Kuber system.
* Receiving Offices need to enter/upload subscription data and ensure accuracy.
* Certificates of Holding will be generated on March 17, 2017, in the name of the sole/principal holder.
* Certificates of Holding can be downloaded/printed by Receiving Offices and will be emailed to investors providing their email addresses.
* Securities will be credited to demat accounts within 2-3 days of allotment, subject to matching of particulars.
* **Printing Certificates of Holding:**
* Holding Certificate needs to be printed in colour on A4 size 100 GSM paper.
* **Servicing and Follow Up:**
* Receiving Offices (banks, post offices, SCHIL, stock exchanges) are responsible for customer service, including updating contact details and processing premature encashment requests.
* Applications must be preserved until the bonds are matured and repaid.
* **Tradability:**
* Bonds are eligible for trading 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 as per the instructions in the original document.
Impact Analysis:
* **Scheduled Commercial Banks (Excluding RRBs):**
* Impact: Implementing the operational guidelines for receiving applications, processing subscriptions, and customer service.
* Action Required: Ensure branches are prepared to receive applications, process them accurately through the e-Kuber system, and provide necessary customer service.
* **Designated Post Offices:**
* Impact: Implementing the operational guidelines for receiving applications, processing subscriptions, and customer service.
* Action Required: Ensure post offices are prepared to receive applications, process them accurately through the e-Kuber system, and provide necessary customer service.
* **Stock Holding Corporation of India Ltd (SHCIL):**
* Impact: Implementing the operational guidelines for receiving applications, processing subscriptions, and customer service.
* Action Required: Ensure SHCIL offices are prepared to receive applications, process them accurately through the e-Kuber system, and provide necessary customer service.
* **National Stock Exchange of India Ltd. & Bombay Stock Exchange Ltd.:**
* Impact: Providing a platform for trading of the bonds in demat form.
* Action Required: Prepare for trading of the bonds once the date is notified by the RBI and ensure that only bonds held in demat form are traded.
* **Investors:**
* Impact: Understanding the application process, KYC requirements, and other provisions of the scheme.
* Action Required: Submit complete applications during the specified period (February 27, 2017, to March 03, 2017) and ensure compliance with KYC norms.
Key Entities Referenced
Sovereign Gold Bonds 2016-17 Series IV: A government securities scheme issued by the Reserve Bank of India on behalf of the Government of India.
Reserve Bank of India: The central bank of India, responsible for issuing and managing the Sovereign Gold Bonds.
Government of India: The issuer of the Sovereign Gold Bonds, with the RBI acting as its agent.
Scheduled Commercial Banks: Banks authorized to receive applications and distribute Sovereign Gold Bonds.
Designated Post Offices: Post offices authorized to receive applications and distribute Sovereign Gold Bonds.
Stock Holding Corporation of India Ltd. (SHCIL): An entity authorized to receive applications and distribute Sovereign Gold Bonds.
National Stock Exchange of India Ltd.: A stock exchange where Sovereign Gold Bonds held in demat form can be traded.
Bombay Stock Exchange Ltd.: A stock exchange where Sovereign Gold Bonds held in demat form can be traded.
RBI/2016-17/235
IDMD.CDD.No.2188/14.04.050/2016-17 February 23, 2017
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 Bonds, 2016-17 – Series IV - Operational Guidelines
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This has reference to the GoI notification F.No. 4(16)-B2(W&M)/2016 and RBI circular
IDMD.CDD.No.2187/14.04.050/2016-17 dated February 23, 2,0 17 on the Sovereign Gold Bonds,
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2016-17-Series IV. FAQs in this regard have been placed on our website (www.rbi.org.in).
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Operational guidelines with regard to this scheme are give n below:
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1. Application
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Application forms from investors will be receiv.ed at branches during normal banking hours from
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February 27, 2017 to March 03, 2017. Receiving Offices need to ensure that the application is
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complete in all respects as incomplete applications are liable to be rejected. Relevant additional
details may be obtained from the applincants, where necessary. The Receiving Offices may make
arrangements to enable the investors wto apply online, in the interest of better customer service.
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2. Joint holding and nominatiodn
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Multiple joint holders andi nominees (of first holder) are permitted. Necessary details may be
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obtained from the applicants as per practice.
3. Know-Your-Customer (KYC) requirements
Know-Your-Customer (KYC) norms shall be the same as that for purchase of physical form of gold.
Identification documents such as passport, Permanent Account Number (PAN) Card, Voter's Identity
Card, Aadhaar card shall be required. In case of minors only, the bank account number may also be
considered as valid for KYC verification. KYC will be done by the issuing banks/SHCIL offices/Post
Offices/agents.
4. Interest on application money
Applicants will be paid interest at prevailing savings bank rate from the date of realization of payment
to the settlement date, i.e. the period for which they are out of funds. In case the applicant’s bank
account is not with the receiving bank, the interest has to be credited by electronic fund transfer to
the account details provided by the applicant.5. Cancellation
Cancellation of application is permitted till the closure of the issue, i.e., March 03, 2017. Part
cancellation of submitted request for purchase of gold bonds is not permitted. No interest on
application money needs to be paid if the application is cancelled.
6. 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.
7. Agency arrangement
Scheduled Commercial Banks 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
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the receiving offices on the applications received and receiving office2s shall share at least 50% of
the commission so received with the agents or sub-agents for the bu0siness procured through them.
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8. Processing through RBI’s e-Kuber system 3
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Sovereign Gold Bonds will be available for subscriptionl at the branches of scheduled commercial
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banks and designated post offices through RBI’s e-p Kuber system. The e-Kuber system can be
accessed either through Infinet or Internet. The ReAceiving Offices need to enter the data or carry
out bulk upload for the subscriptions receivedf by them. They may ensure accuracy of entry of
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data to prevent occurrence of any inadvertenet errors. An immediate confirmation will be provided
to them for receipt of application. In additiown., a confirmation scroll will be provided for file uploads
to enable the Receiving Offices to updat e their database. On the date of allotment, i.e., March 17,
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2017, Certificates of Holding will be generated for 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
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Certificates of Holding will also rbe sent through e-mail to the investors who have provided their
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email address. The securities will be credited in their de-mat accounts within 2-3 days of
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allotment, subject to matchting of particulars furnished in the application with the Depositories’
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records. W
9. Printing Certificates of Holding
Holding Certificate needs to be printed in colour on A4 size 100 GSM paper.
10. Servicing and follow up
Receiving Offices, i.e., branches of the Scheduled Commercial Banks, designated post offices,
SCHIL and stock exchanges (NSE Ltd and BSE) 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.
11. 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)12. 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,
(Rajendra Kumar)
General Manager
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