Reserve Bank of India
RBI2015-16/290
IDMD.CDD.No.1573/14.04.050/2015-16
January 14, 2016
The Chairman& Managing Director
All Scheduled Commercial Banks,
(Excluding RRBs)
Stock Holding Corporation of India Ltd.(SHCIL)
Sovereign Gold Bonds 2015-16
Government of India has vide its
Notification F.No. 4(19)-W&M/2014 dated January 14, 2016 announced
that the Sovereign Gold Bonds, 2016 (“the Bonds”) will be open for
subscription from January 18, 2016 to January 22, 2016. 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,
Charitable Institution and University. “Person resident in India” is
defined under section 2(v) read with section 2(u) of the Foreign
Exchange Management Act, 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.
3. Date of Issue
Date of issuance shall be February 08, 2016.
4. Denomination
The Bonds shall be denominated in
units of one gram of gold and multiples thereof. Minimum investment in
the Bonds shall be two grams with a maximum limit of subscription of
five hundred grams per person per fiscal year (April – March).
5. Issue Price
Price of the Bonds shall be fixed
in Indian Rupees on the basis of the previous week’s (Monday – Friday)
simple average closing price for gold of 999 purity, published by the
India Bullion and Jewellers Association Ltd. (IBJA).
6. Interest
The Bonds shall bear interest at
the rate of 2.75 percent (fixed rate) per annum on the amount of initial
investment. Interest shall be paid in half-yearly rests and the last
interest shall be payable on maturity along with the principal.
7. Receiving Offices
Scheduled commercial banks
(excluding RRBs), designated Post Offices (as may be notified) and Stock
Holding Corporation of India Ltd (SHCIL) are authorized to receive
applications for the Bonds either directly or through agents.
8. Payment Options
Payment shall be accepted in
Indian Rupees through Cash upto a maximum of Rs.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 receiving
office.
9. Redemption
The Bonds shall be repayable on
the expiration of eight years from February 8, 2016, the date of issue
of Gold bonds. Pre-mature redemption of the Bond is permitted from fifth
year of the date of issue on the interest payment dates.
The redemption price shall be
fixed in Indian Rupees on the basis of the previous week’s (Monday –
Friday) simple average closing price for gold of 999 purity, published
by IBJA.
10. Repayment
The receiving office shall inform the investor of the date of maturity of the Bond one month before its maturity.
11. Eligibility for Statutory Liquidity Ratio (SLR)
The investment in the Bonds shall be eligible for SLR.
12. 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.
13. Tax Treatment
Interest on the Bonds shall be
taxable as per the provisions of the Income-tax Act, 1961. Capital gains
tax treatment will be the same as that for physical gold.
14. 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. The receiving office shall issue an
acknowledgment receipt in Form ‘B’ to the applicant.
15. Nomination
Nomination 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.
16. Transferability
The Bonds 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.
17. Tradability of bonds
The Bonds shall be eligible for trading from such date as may be notified by the Reserve Bank of India.
18. Commission for distribution
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.
19. 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(13) W&M/2008, dated 8th October 2008 shall apply to the Bonds.
Yours faithfully,
(Arun Bhagoliwal)
Deputy General Manager
Encls.: As above.
