The Chairman & Managing
State Bank of India & 18 Nationalised Banks
Axis Bank Ltd., ICICI Bank Ltd., HDFC Bank Ltd.,
Stock Holding Corporation of India Ltd. (SHCIL)
7.75% Savings (Taxable) Bonds,
2018 - Operational Guidelines
This has reference to the GoI Notifications F.No.4(28) - W&M/2017 dated
January 03, 2018 and RBI circular
IDMD.CDD.No.1671/13.01.299/2017-18 dated January 03, 2018 read
with Notification F.No.4(28) - W&M/2017
dated January 08, 2018 and RBI
circular IDMD.CDD.No.1728/13.01.299/2017-18 dated January 08, 2018,
on 7.75% Savings (Taxable) Bonds, 2018 (Appendix 1). The Operational
Guidelines with regard to this scheme are given in the Annexure.
2. These Guidelines are issued
by RBI in exercise of the powers conferred by sub-section (2) of the
Section 29 of the Government Securities Act, 2006 and of all the powers
enabling it in this behalf.
Chief General Manager
Encls: Annexure & Appendix
Savings (Taxable) Bonds, 2018 - Operational Guidelines
Procedure to be followed by
Receiving Offices (RO) for handling 7.75% Savings (Taxable) Bonds, 2018:
It may be noted that as per Para
10 (a) of the GoI Notification dated January
03, 2018, the Scheme shall be operated through any number of
branches of State Bank of India, Nationalized Banks, three Private Sector
Banks and SHCIL (hereinafter referred to as “Receiving Offices.”) Receiving
Offices, are required to make arrangements to implement the Scheme through
their branches, sensitize their staff about the Scheme and make application
forms (Revised Form A for both “Cumulative” and “Non cumulative” options
separately) available at their branches. Receiving Offices shall use Security code “20081” for
reporting transactions under 7.75% Savings (Taxable) Bonds, 2018 to the
CAS, RBI, Nagpur. The procedure to be followed by these offices for
operation of the Scheme is outlined below:
A. Procedure to be followed at
Receiving Offices in respect of Bond Ledger Accounts
Receipt of Applications for Bond
1. The role of the Receiving
Offices extends to:
of bonds by opening an account styled "Bond Ledger Account" in
their books against applications received;
the account during its tenure; and
repayment on maturity.
The application formats for
cumulative and non-cumulative bonds may be printed in different colours for easy identification. The application forms shall be in bilingual form viz.
Hindi and English.
1.1 The application forms shall
be received in Revised Form 'A' (Annexure 2 to the Government of India Notification dated January 08, 2018)
or as near thereto with requisite particulars. The application money may be
received as cash/ draft/ cheque or any electronic mode acceptable to the
1.2 The application shall be
subjected to careful scrutiny to ensure that it is complete in all
respects. A counter receipt in the form given in Appendix II may be issued to the applicants,
specifying therein the date of issue of 'Certificate of Holding'.
1.3 The Receiving Offices shall
open an account styled 'Bond Ledger Account' in the name of each subscriber
with the amount of subscription. Each account may be allotted a six digit
code with an alpha prefix denoting the bank and its branch code (e.g.
SBIPNBLA 000001 - State Bank of India, Pune Bond Ledger Account 000001).
Note: (i) The Bond Ledger
Account shall be opened in the name of the investor/s on the date of tender
of cash or the date of realisation of draft /cheque or date of receipt of
payment in electronic mode. This date of realisation of payment shall be
called as ‘Date of Subscription’.
ii. Only one 'Bond Ledger
Account' shall be opened in the name of each investor. No new account or
multiple accounts shall be opened or maintained in the name of the same
holder at the branch and investments subsequently made by him, shall be
accounted for in the same Bond Ledger Account.
(iii) The tenure of 7 years
shall be reckoned from the date of subscription in the case of each
(iv) An advice in the form given
in Appendix IIA may be issued to
the investor as and when additional investments are made by him in the
bonds for credit to the Bond Ledger Account.
1.4 The branches may also
maintain a "Register of Bond Ledger Accounts - All holders" as
per proforma given in Appendix III (Form
A or B as applicable).
1.5 Immediately after opening
the Bond Ledger Account, the branches shall issue a "Certificate of
Holding" to the subscriber/s evidencing the Bond Ledger Account in
his/their name, in the form given in Annexure 1 to the Government of India Notification dated 3 January 2018,
Form 'TBX' is to be used for non-cumulative option and Form 'TBY' for
Remittance to Central Accounts
Section (CAS), RBI, Nagpur
1.6 Branches of the Receiving
Offices shall remit the amount of subscription received to their Link Cell
at Nagpur on daily basis for credit to the Government Account at Central
Account Section (CAS), Nagpur. The advice shall indicate the distinctive
number of relative Bond Ledger Accounts and due date to which the
remittance to CAS, Nagpur relates.
Note : (i) As per the existing procedure, remittance of
subscription for credit to Government Account beyond 3 days from the date
of receipt of cash / electronic means or the date of realisation of
relative draft/ cheque/ electronic means, shall attract penal interest at
the coupon rate from the date of receipt of subscription till the date of
actual reporting to CAS. The penal interest shall be recovered by CAS from
Reporting to Public Debt Office
(PDO) of Jurisdiction
1.7 The Link Cells of Receiving
Offices at Nagpur/the Main branch of SBI at Nagpur shall sort the branch
wise data of the Appendix IV statement
in respect of all branches on a monthly basis and submit data in soft and
hard copy to the Public Debt Office (PDO) of jurisdiction with a
declaration to the effect that Appendix IVdata
tallies with the CAS data on a monthly basis besides submission of the
above statement to CAS, Nagpur for the purpose of claiming
In case of non-submission of
requisite data within the 15th day of the following month by the Link
Cells/ SBI Main branch at Nagpur to PDOs, a penalty of ? 500/- per day
shall be levied and recovered from ROs by PDOs for each day of delay beyond
the above date.
1.8 The Receiving Offices shall
register the nominations made by the subscribers in the prescribed form
(Annexure 4 to the Government of India
Notification dated January 03, 2018). For this purpose, a
"Register of Nominations" (as per proforma given in Appendix V) shall be maintained. The nomination
forms shall be examined by the branches to ensure that:
nomination has been made by a sole holder or all joint holders other than a
particulars of the Bond Ledger Account have been correctly mentioned
therein (The branch may enter BLA particulars when the application is made
for the first time);
name/s with expanded initials and full address/es of the nominee/s (with
bank account particulars) have been incorporated in the form;
date of birth of the nominee, if he is a minor, and the name and address of
the person appointed to receive the amount on his behalf during the
minority in the event of the death of the holder, have been furnished;
signature has been made by means of a thumb impression, it should be
attested by a Magistrate/ Notary public/ Treasury Officer / bank official.
1.9 Each nomination shall be
allotted a distinct number. A rubber stamp bearing the undernoted legend
shall be affixed on the form of nomination, under proper authentication:
Bank Branch ………………………………………………….
Registered at No.
@ on ………………………………………………………………….
@ (The date will be the date as
indicated on the nomination form by the holder)
An acknowledgement in form given
in Appendix VI shall be issued to
The nomination forms may be kept
under proper custody.
Cancellation of Nomination
1.10 If the holder of a Bond
Ledger Account applies for cancellation of an existing nomination in the
prescribed form (Annexure 5 to the Government
Notification dated January 03, 2018), it shall be examined to see
particulars of the Bond Ledger Account have been stated in the form; and
name/s of the nominee/s has/have been correctly mentioned in the form.
If the form is in order, the
cancellation shall be entered in the appropriate column in the Register of
Nomination (Appendix V) and a rubber stamp
as under is affixed on (a) the original form of nomination and (b) the form
of cancellation of nomination:
Name of the bank branch
Nomination cancelled as per form
of cancellation of Nomination dated ….…………
An acknowledgement as per the
form given in Appendix VII shall
be thereafter issued to the holder.
Note: All forms of cancellation of nomination shall be filed
together with the original Nomination form.
Changes to existing nomination
1.11 The holder can change the
existing nomination, on submission of a fresh nomination in form given in
Annexure 4 to Government Notification dated 3
January 2018. It may be examined and dealt with in the same way as
the original nomination. Appropriate entry shall be made in the Register of
Nomination (Appendix V) and rubber stamp as
provided for in paragraph 1.9 above
shall be affixed on the fresh nomination form under proper authentication.
A fresh acknowledgement in the prescribed form (Appendix
VI) shall be issued.
Claims of nominee/s
1.12 On the death of the holder,
nominee’s/nominees’ claim may be recognized in terms of the provisions of
Section 9 of the Government Securities Act 2006 read with Chapter III of
the Government Securities Regulations 2007.
Once a claim is received by the
Receiving Office it may recognize the claim in terms of Section 9 of the
Government Securities Act 2006 and Chapter III of the Government Securities
Regulation 2007, subject to its satisfaction with respect to the legality,
genuineness, and finality thereof, subject to its satisfaction that there
is no rival claim in respect of such Bond Ledger Account and on production
of all documents required to substantiate the claim.
For that purpose it may call for
any other document or declaration, as it may consider necessary. It may
also require the claimant to furnish a bond of indemnity for such amount as
it may think fit, if found necessary.
(a) If the bond held in Bond
Ledger Account has already matured, repayment would be made to the
nominee/s after obtaining proper discharge from him/them. The discharge of
the nominee/s should be attested by the Magistrate/ their bankers.
(b) In case the bond held in the
form of Bond Ledger Account has not matured for repayment, the name/s of
the nominee/s shall be substituted as the Account holder/s and a fresh
Certificate of Holding shall be issued under proper authentication.
Note : Fresh Bond Ledger Account should not be opened in
Payment of interest
1.13 The Bond Ledger Accounts
shall be serviced by the branches of the ROs maintaining them. The interest
on the bonds shall accrue from the date of subscription. Accordingly, in
respect of non-cumulative Bond Ledger Accounts, interest at the rate of
7.75% shall be paid uniformly at half-yearly intervals on 1st August and
1st February every year. Broken period interest from date of issues of bond
up to 31th July or 31st January, as the case may be, shall be paid. The
payment of interest may be made by credit to the bank account of the
Claim for reimbursement from
CAS, RBI, Nagpur:
1.14 The branches of Receiving
Offices making interest payment shall claim reimbursement from the CAS,
RBI, Nagpur through their Link Cell, giving account-wise details of
payments made. (Bond Ledger Account Number, amount of investment on which
interest has been paid and the interest amount). A scroll shall be prepared
in this regard by the branches of Receiving Offices handling the Scheme (as
per Appendix XI & XII) and furnished to link offices. The scrolls
shall be prepared by each bank branch in quadruplicate. The fourth copy of
these scrolls shall be retained by each branch with itself and first three
copies shall be forwarded to its concerned link office.
The link office shall
consolidate the scrolls received from the different branches and prepare a
consolidated scroll branch-wise in triplicate. Soft copy of the
consolidated claim for reimbursement of interest shall be forwarded by the
Link office to the CAS, RBI, Nagpur in ASCII file format along with
physical mandate for adjustment in the Government accounts. The claims
should be duly supported by a certificate from the Internal / Concurrent
Auditors to the effect that the interest payment figures have been checked
100% and that the amount has already been paid to the investors. The first
physical copy of the consolidated scroll, together with a copy each of the
scrolls received from the branches, shall be forwarded by the link office
to the Controller of Accounts, Department of Economic Affairs, Ministry of
Finance, Government of India, New Delhi. The second physical copy of the
consolidated scroll, together with a copy each of the scrolls received from
the branches, shall be forwarded by the link office to the Public Debt
Office of jurisdiction. The third copy with the triplicate copies of the
branch scrolls shall be retained by the link office for its record.
Recognition of title to the
bonds of a deceased holder.
1.15 In terms of the Government
Securities Act, 2006, and the Regulations framed thereunder (Government
Securities Regulations, 2007), it is prescribed as follows:
The ROs may recognise a claim to
the title of the bond held by a deceased holder on the basis of any of such
documents, subject to its satisfaction with respect to the legality,
genuineness, and finality thereof, and of the fact that there is no rival
claim in respect of such Government security. For this purpose they may
depend on the documents prescribed under Regulations 6(1) & (2) of Government
Securities Regulations, 2007 where the value of the outstanding claim
exceeds ? 10 Lakhs and where the value is less than ? 10 Lakhs, the
documents prescribed under Regulation 2A ibid may be
Note : The above provision is
applicable where no valid nomination exists. Claims involving
legal representation may be disposed of by the Receiving Offices in
accordance with the above provisions. In the event of doubt, the case may
be referred to PDO of RBI of jurisdiction with full details.
Repayment of Bonds
1.16 Issue of Advices to
Investors: The attention of the holders shall be drawn to the ensuing
maturity of their bonds one month before the date on which investment in
the BLA is due for repayment. It should be ensured that the advices are
sent only in respect of BLAs which are free from stoppage. The investors
may also be advised to confirm the bank account details to which the
redemption proceeds will be credited.
Post Maturity Interest
1.17. The bonds shall be
repayable on expiry of seven years from the date of subscription. No
interest would accrue after the maturity of the bond. The banks therefore
shall intimate the investors that the investment does not carry post maturity interest prominently in the advice mentioned in Paragraph 1.16.
The banks may not insist upon
duly discharged Certificate of Holding at the time of redemption. The
payment of maturity proceeds to the holder of BLA shall be made by credit
to the account of the holder.
Payment to investors:
1.18 It should be ensured that
actual payment of discharge value is made only on the due date,
by electronic mode by crediting the investors account.
In the event of holiday being
declared by the State Government under Negotiable Instrument Act, 1881, on
the maturity date or maturity date being Sunday, the maturity proceeds may
be paid on the previous working day.
The repayment shall be made only
by the branch of the Receiving Offices concerned, maintaining the BLA.
Details of closure of the investment(s) i.e. date(s) and amount(s) etc.
shall be maintained by the Receiving Office.
If multiple investments are made
against the same BLA, the redemption of individual investment shall be
reflected therein and a fresh Certificate of Holding duly indicating the
BLA number, date of maturity and amounts in respect of individual
investments shall be generated and given to the investor. It should be ensured
that the outstanding balance appearing in the BLA and the statement of
holding are the same.
Interest payment: In respect of investments held under
non-cumulative scheme, the interest for the broken period/last half year
shall be paid along with the principal. In respect of investments held
under cumulative scheme, interest on bond shall be paid along with the
principal. The advices to the investors shall invariably contain the legend
“interest will not accrue on the investment after ---/---/---- (date of
Note: The maturity proceeds of
joint holders of BLA shall be released in favour of one of the joint
holders in whose favour, all other remaining holders have executed a Power
of Attorney as per the prescribed format of the joint holders Power of
Attorney (Appendix XIII).
1.19 Premature encashment of
bonds to individual investors in the age group of sixty years and above
after a minimum lock in period from the date of issue is permitted. An
investor, desiring to avail of the facility of premature encashment, will
have to submit documentary evidence in support of his/her date of birth to
satisfaction of the Receiving Offices. In case of non-cumulative bonds, the
premature encashment payment shall be made on the following interest
payment due date i.e 1st August and 1st February (the payment can be made
on any date, and not necessarily 1st August and 1st February).
Penalty for premature
encashment: 50% of interest due and
payable for the last six months period of the holding period shall be
recovered as penalty from the investor for premature encashment both in
respect of cumulative and non- cumulative bonds.
Investors can be allowed to
withdraw entire amount of investment made on any single application.
However, if a holder is having multiple investments in the same BLA, he/she
can make one or more request(s) for premature encashment of entire
amount(s) of one or more investment(s), which has/have completed minimum
lock-in period as per the Government of India Notification dated 03
January, 2018 from the date of issue.
Partial encashment of amount
invested on a single application is
The investor needs to submit a
request letter for the full amount to be prematurely encashed.
1.20 The principal and the
interest shall be separately accounted for and the scrolls drawn separately
and kept on records for audit/verification.
Reporting to Government of
1.21 The Receiving Offices shall
submit a statement showing the payments and outstanding in respect of the
BLAs under the scheme on monthly basis to the Controller of Accounts,
Department of Economic Affairs, Ministry of Finance, Government of India,
New Delhi through their Link Office. The repayment scrolls pertaining to
the Principal and the interest shall be drawn separately as per Appendix XI & XII for this purpose.
Reporting to PDO of
1.22. The monthly report sent to
PDO of Jurisdiction shall invariably contain the details of repayments in
part D of Appendix IV. The repayment
scrolls pertaining to the principal and the interest drawn separately as
per Appendix XII & XI for the month shall also be submitted
alongside. A copy of outstanding list of BLAs shall also be sent to PDO.
Payment of Brokerage
1.23 Brokerage at the rate of
0.5% of the amount mobilized may be paid to the brokers, registered with
the Receiving Offices, on the applications tendered by them and bearing
their stamps, on behalf of their clients. The Receiving Offices may effect
the payment of brokerage to the brokers after examining the bills submitted
to them and prefer their claims through link office for reimbursement
thereof from CAS, Nagpur on a monthly basis.
Claim for reimbursement of
repayment from Central Accounts Section, RBI, Nagpur
1.24 The Receiving Offices shall
prefer claims for reimbursement only in respect of the repayments effected
by them. Such claims shall be sent to the Central Accounts Section, Reserve
Bank of India, Nagpur, electronically (ASCII format) through the respective
Link Cells/main branch of SBI, Nagpur together with physical mandate
separately for principal and interest. The claims shall be duly supported
by a certificate from the Internal/Concurrent Auditors to the effect that
the repayment figures have been checked 100% and that the amount has
already been paid to the investors.
Loss of Certificate of Holding
1.25 If a Certificate of Holding
issued to the Bond Ledger Account holder/s is reported lost/ destroyed, a
duplicate thereof shall be issued to the holder/s on receipt of a request
in this regard. However, no fees shall be charged to the holder/s for the
Settlement of claims of
Remuneration (Brokerage/commission/ Turnover commission) of Receiving
1.26 Receiving Offices shall be
reimbursed charges for handling the BLAs as follows:
A. Remuneration/ reimbursement
to be claimed on monthly
basis from CAS, Nagpur (Appendix VIII)
at 0.50 paise per ? 100 of subscription amount mobilised on behalf of
clients/paid to the brokers registered with the ROs, as mentioned at para 1.23 above.
for handling the subscription payable at 1/16th of one per cent of the
subscription amount mobilised.
The Receiving Office shall
collate and forward the consolidated bill of charges on a monthly basis as
per the proforma in Appendix VIII to
the CAS, Nagpur. The CAS, Nagpur may verify the particulars from the Appendix VIII received from the Receiving
Offices before paying brokerage and commission every month.
B. Remuneration to be claimed on
a quarterly basis from CAS,
commission at 5.50 paise per ? 100 on interest paid, principal amount
repaid in respect of the accounts held under BLA Scheme.
The Link Offices shall submit
the statement of charges as at the end of each quarter ending 31st
March/30th June/30th September/31st December in the Proforma in Appendix IX to CAS, Nagpur.
C. Remuneration/ reimbursement
to be claimed annually from the PDO of jurisdiction (Appendix
(i) Service Charge at ? 25 per
every new BLA opened and ? 20 for every account existing.
The Receiving Office shall
collate and submit the consolidated bill of charges in this regard as per
proforma in Appendix X to the PDO
of Jurisdiction. PDO shall verify the particulars from the Appendix X received from the Receiving
Offices before paying the service charges.
Transfer of Accounts
1.27 Transfer of BLAs for the
purpose of sale or part transfer is not allowed. However, the facility of
intra-bank and inter-bank branch transfer of the BLAs will be available for
customers under exceptional circumstances which makes servicing by existing
Receiving Office impossible. The procedure to be followed by the branches
of the Receiving Offices in this regard will be as follows:
(a) Action at transferor branch
of the Receiving Office:
A simple letter from the holder
requesting the transfer of BLA along with the Certificate of Holding shall
be obtained. The branch of the Receiving Office shall examine the request
and if it is in order, the branch shall close the account and issue a letter
to the transferee branch of the Receiving Office directly (with
a copy to the transferor) indicating the particulars of the account
transferred and enclosing a copy of the Certificate of Holding. The letter
should indicate, among others, the tenure that has been completed and due
date and period upto which the interest has been paid to the holder as also
interest payable, if any, in case of non-cumulative option.
Note: The Certificate of Holding
shall be cancelled with the remarks “Account transferred to
………………..Receiving Office/branch on ……………vide transfer order dated …………….
The cancelled Certificate of Holdings shall be filed separately.
(b) Action at the transferee
branch of the Receiving Office:
The transferee branch of the
Receiving Office shall ensure that the request is in the bank’s letterhead
and bears the stamp and has been received directly from the transferor
Receiving Office. On receipt of the letter from branch of the transferor
Receiving Office, branch of the transferee Receiving Office shall open a
Bond Ledger Account in the name of the transferee. It shall also issue a
Certificate of Holding to the transferee (buyer) evidencing the Bond Ledger
Account opened by it in his name in the form given in Annexure 1 (Form
‘TBX’ or Form ‘TBY’ as applicable) to the Government Notification dated
January 03, 2018 for the residual period of maturity.
Both transferor and transferee
branch shall report the transfers under Appendix
IV to the respective PDOs.
Compensation Structure for delay
in payment of interest and/or Principal
1.28 The Receiving Office shall
compensate an investor, for the financial loss due to late receipt/ delayed
credit of interest/ maturity value, at a fixed rate of 8% per annum.
Preservation of Records
1.29 The period for which the
records in respect of the Bond Ledger Accounts shall be preserved is
Applications for Bond Ledger
Surrendered Counter Receipts
3 months after the the
delivery of Certificate of Holding
Registers of Bond Ledger
Register of Nominations,
Advices regarding acknowledgement of registration of nomination/
cancellation of nomination etc.
3 years from the date of
repayment of the Bonds covered by the form
Forms of nomination/
Documents submitted in case of
recognition of title etc.
Scrolls submitted to PDO of
jurisdiction/ Controller of Accounts, Ministry of Finance, New Delhi
Statements submitted to PDO of
5 years or repayment whichever