Executive Summary:
This document outlines operational guidelines for the Sovereign Gold Bonds 2017-18 Series II, following the GoI notification and RBI circular dated July 06, 2017. It details procedures for application, KYC, interest payment, cancellation, agency arrangements, and processing through RBI's e-Kuber system. The application period is from July 10, 2017, to July 14, 2017, and the allotment date is July 28, 2017.
Key Points / Main Content:
Application Process:
* Application forms will be received at branches during normal banking hours from July 10, 2017 to July 14, 2017.
* Receiving Offices need to ensure applications are complete and may provide online application facilities.
* Multiple joint holders and nominees are permitted.
* Cancellation of application is permitted until the closure of the issue, July 14, 2017; part cancellation is not allowed.
KYC and Interest:
* KYC norms are the same as for physical gold purchases; accepted documents include passport, PAN card, Voter's ID, and Aadhaar card.
* For minors only, the bank account number may also be considered as valid for KYC verification.
* Interest on application money will be paid at the prevailing savings bank rate from the payment realization date to the settlement date.
Bond Management:
* Lien marking will follow the Government Securities Act, 2006.
* Sovereign Gold Bonds will be available for subscription through RBI's e-Kuber system.
* Certificates of Holding will be generated on July 28, 2017, and sent via email to investors who provided their email address.
* Holding Certificates should be printed in colour on A4 size 100 GSM paper.
* Only bonds held in demat form with depositories can be traded in stock exchanges.
Agency and Servicing:
* Scheduled Commercial Banks may engage NBFCs, NSC agents, and others to collect application forms.
* Commission for distribution is rupee one per hundred of the total subscription received, with receiving offices sharing at least 50% with agents.
* Receiving Offices (banks, post offices, SHCIL, stock exchanges) will provide services such as updating contact details and processing premature encashment requests.
* Receiving Offices must preserve applications until the bonds mature and are repaid.
Impact Analysis:
Scheduled Commercial Banks:
* Impact: Must adhere to operational guidelines for receiving applications, processing subscriptions, and providing customer service for Sovereign Gold Bonds 2017-18 Series II.
* Action Required: Implement procedures for application processing, KYC verification, interest payment, and engagement of agents.
Designated Post Offices:
* Impact: Must adhere to operational guidelines for receiving applications, processing subscriptions, and providing customer service for Sovereign Gold Bonds 2017-18 Series II.
* Action Required: Implement procedures for application processing, KYC verification, interest payment.
SHCIL and Stock Exchanges (NSE, BSE):
* Impact: Must adhere to operational guidelines for receiving applications, processing subscriptions, and providing customer service for Sovereign Gold Bonds 2017-18 Series II. Stock exchanges facilitate trading of bonds held in demat form.
* Action Required: Implement procedures for application processing, KYC verification, and facilitate bond trading in demat form.
Investors:
* Impact: Need to follow the application process, provide required KYC documents, and are eligible for interest on application money.
* Action Required: Submit complete application forms with necessary KYC documents between July 10, 2017, and July 14, 2017.
Key Entities Referenced
Sovereign Gold Bonds, 2017-18 Series II: A government securities scheme allowing investment in gold in dematerialized form.
Scheduled Commercial Banks: Banks that are listed in the Second Schedule of the Reserve Bank of India Act, 1934.
Reserve Bank of India (RBI): The central bank of India.
Stock Holding Corporation of India Ltd. (SHCIL): A financial institution involved in holding and servicing stocks and bonds.
National Stock Exchange of India Ltd. (NSE): A stock exchange in India.
Bombay Stock Exchange Ltd. (BSE): A stock exchange in India.
Permanent Account Number (PAN): A unique identification number issued to all taxpayers in India.
Aadhaar card: A 12-digit individual identification number issued by the Unique Identification Authority of India.
RBI/2017-18/18
IDMD.CDD.No.29/14.04.050/2017-18 July 06, 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,
Sovereign Gold Bonds, 2017-18 – Series II - Operational Guidelines
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This has reference to the GoI notification F.No.4(20)-B/(W&M0)/2017 and RBI circular
IDMD.CDD.No.28/14.04.050/2017-18 dated July 06, 2017 on2 the Sovereign Gold Bonds,
2017-18-Series II. FAQs in this regard have been placed o,n our website (www.rbi.org.in).
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Operational guidelines with regard to this scheme are given 1below:
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1. Application r
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Application forms from investors will be received a t branches during normal banking hours from
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July 10, 2017 to July 14, 2017. Receiving O.ffices need to ensure that the application is
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complete in all respects as incomplete applic.ations are liable to be rejected. Relevant additional
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details may be obtained from the applicants, where necessary. The Receiving Offices may
make arrangements to enable the invesntors to apply online, in the interest of better customer
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service.
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2. Joint holding and nominatiodn
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Multiple joint holders and Wniominees (of first holder) are permitted. Necessary details may be
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, ie. 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., July 14, 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 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.
8. Processing through RBI’s e-Kuber system
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Sovereign Gold Bonds will be available for subscription at th0e branches of scheduled
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commercial banks and designated post offices through RBI’s e- Kuber system. The e-Kuber
system can be accessed either through Infinet or Internet.3 ,The Receiving Offices need to
enter the data or carry out bulk upload for the subscript1ions received by them. They may
ensure accuracy of entry of data to prevent occurrle nce of any inadvertent errors. An
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immediate confirmation will be provided to them forr receipt of application. In addition, a
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confirmation scroll will be provided for file uploadsA to enable the Receiving Offices to update
their database. On the date of allotment, i.e., J uly 28, 2017. Certificates of Holding will be
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generated for all the subscriptions in the naeme of the sole/principal holder. The Receiving
Offices can download the same and take p.rintouts. The Certificates of Holding will also be
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sent through e-mail to the investors who have provided their email address. The securities
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will be credited in their de-mat accounts by the depositories, in due course, subject to
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matching of particulars furnished in the application with the depositories’ records.
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9. Printing Certificates of Holding
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Holding Certificate needs tWo 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,
(Shyni Sunil)
Deputy General Manager
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