The Chairman & Managing
All Scheduled Commercial Banks,
Designated Post Offices
Stock Holding Corporation of India Ltd. (SHCIL)
National Stock Exchange of India Ltd. & Bombay Stock Exchange Ltd.
Sovereign Gold Bond Scheme
Government of India has vide
its Notification F.No. 4(22)-W&M/2018
dated October 08, 2018 announced the Sovereign Gold Bond Scheme
2018-19 (“the Bonds”). Under the scheme there will be a distinct series
(starting from Series II) for every tranche which will be indicated on the
Bond issued to the investor. 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:
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, HUFs, 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,
2. Form of
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
For the applications received
during a given week, the bond shall be issued on the second business day of
The Bonds shall be denominated
in units of one gram of gold and multiples thereof. Minimum investment in
the Bonds shall be one gram with a maximum limit of subscription of 4 kg
for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts
and similar entities notified by the government from time to time per
fiscal year (April – March),
case of joint holding, the above limits shall be applicable to the first
ceiling will include bonds subscribed under different tranches during
initial issuance by Government and those purchased from the secondary
ceiling on investment will not include the holdings as collateral by banks
and other Financial Institutions.
The nominal value of the Bonds
shall be fixed in Indian Rupees fixed on the basis of simple average of
closing price of gold of 999 purity published by the India Bullion and
Jewelers Association Limited for the last 3 working days of the week
preceding the subscription period. The issue price of the Gold Bonds will
be ? 50 per gram less than the nominal value to those investors applying
online and the payment against the application is made through digital
The Subscription of the Gold
Bonds under this Scheme shall be open as specified in Section 7 below.
Provided that the Central
Government may, with prior notice, close the Scheme at any time before the
period specified above
2018-19 Series II
October 15-19, 2018
October 23, 2018
2018-19 Series III
November 05-09, 2018
November 13, 2018
2018-19 Series IV
December 24-28, 2018
January 01, 2019
2018-19 Series V
January 14–18, 2019
January 22, 2019
2018-19 Series VI
February 04-08, 2019
February 12, 2019
The Bonds shall bear interest
from the date of issue at the rate of 2.50 percent (fixed rate) per annum
on the nominal value. Interest shall be paid in half-yearly rests and the
last interest shall be payable on maturity along with the principal.
Banks (excluding RRBs), designated Post Offices (as may be notified),
Stock Holding Corporation of India Ltd (SHCIL) and recognized stock
exchanges viz., National Stock Exchange of India
Limited and Bombay Stock Exchange Ltd. are authorized to
receive applications for the Bonds either directly or through agents.
Payment shall be accepted in
Indian Rupees through cash up to a maximum of ? 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.
i) The Bonds shall be repayable
on the expiration of eight years from the date of issue of the Bonds.
Pre-mature redemption of the Bond is permitted from fifth year of the date
of issue on the interest payment dates.
ii) The redemption price shall
be fixed in Indian Rupees and the redemption price shall be based on simple
average of closing price of gold of 999 purity of the previous 3 working
days, published by the India Bullion and Jewelers Association Limited.
RBI/depository shall inform the
investor of the date of maturity of the Bond one month before its maturity.
Eligibility for Statutory Liquidity Ratio (SLR)
Bonds acquired by the banks
through the process of invoking lien/hypothecation/pledge alone shall be
counted towards Statutory Liquidity Ratio.
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. The loan
against SGBs would be subject to decision of the lending bank/institution,
and cannot be inferred as a matter of right by the SGB holder.
Interest on the Bonds shall be
taxable as per the provisions of the Income-tax Act, 1961. The capital
gains tax arising on redemption of SGB to an individual has been exempted.
The indexation benefits will be provided to long term capital gains arising
to any person on transfer of bond
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. Every
application must be accompanied by the ‘PAN Number’ issued by the Income
Tax Department to the investor(s). The receiving office shall issue an
acknowledgment receipt in Form ‘B’ to
Nomination of 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. An individual Non - resident Indian may get the
security transferred in his name on account of his being a nominee of a
deceased investor provided that:
Non-Resident investor shall need to hold the security till early redemption
or till maturity; and
interest and maturity proceeds of the investment shall not be repatriable.
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.
Tradability of bonds
The Bonds shall be eligible for
trading from such date as may be notified by the Reserve Bank of India.
Commission for mobilizing subscription
Commission for mobilizing
subscription 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
21. 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(2)
W&M/2018, dated 27th March 2018 shall apply to the Bonds.
22. Operational guidelines
relating to Sovereign Gold Bonds are issued vide circular IDMD.CDD.No.822/14.04.050/2018-19 dated October
Deputy General Manager
Encls.: As above.