Sovereign Gold Bonds 2015-16
RBI/2015-16/218
IDMD.CDD.No.939/14.04.050/2015-16
October 30, 2015
The Chairman &
Managing Director
All Scheduled Commercial Banks
(Excluding RRBs)
Dear Sir/Madam,
Sovereign Gold Bonds, 2015-16
It has been decided by
the Government of India, as per their Notification F.No. 4(19)-W&M/2014
dated October 30, 2015, to issue Sovereign Gold Bonds, 2015 (“the Bonds”) with
effect from November 05, 2015 to November 20, 2015. 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.
“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 November 26, 2015.
The investors can apply for the Bonds in
receiving offices from November 05, 2015 to November 20, 2015. The issuance can
be closed by Government of India earlier than November 20, 2015 with a prior
notice.
4. Denomination
The Bonds shall be denominated in units of one
gram of gold and multiples thereof. Minimum investment in the Bonds shall be 2
grams with a maximum subscription of 500 grams per person per fiscal year
(April – March). In case of joint holding, the limit applies to the first
applicant.
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 per cent (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)
and designated Post Offices (as may be notified) 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 or Demand Drafts or Cheque or Electronic banking. Cheque or draft
should be drawn in favour of the bank / post office (Receiving Office),
specified in paragraph 7 above and payable at the place where the applications
are tendered.
9. Redemption
1.
The Bonds shall be
repayable on the expiration of eight years from the date of issue. Pre-mature
redemption of the Bond is allowed from fifth year of the date of issue on the
interest payment dates.
2.
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 Bonds, 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 the 1st December, 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 the 1st December, 2007.
17. Tradability in 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
the 8th October, 2008 shall apply to the Bonds.
Yours faithfully,
(Chandan Kumar)
Deputy General Manager
Encls.: As above.