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(25)-B/(W&M)/2017 dated October 06, 2017 announced
that the Sovereign Gold Bond Scheme. Under the scheme SGBs (The Bonds) will
be issued in a series of weekly issuances which will be open for
subscription from Monday to Wednesday of every week starting from October
09, 2017. 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
3. Date of Issue
The bond shall be issued on the
first business day of next week for the applications received during a
4. Calendar of Issuance:
The Sovereign Gold Bonds will be
issued every week from October 2017 to December 2017 as per the calendar
October 09-11, 2017
October 16, 2017
October 16-18, 2017
October 23, 2017
October 23-25, 2017
October 30, 2017
October 30-November 01, 2017
November 06, 2017
November 06-08, 2017
November 13, 2017
November 13-15, 2017
November 20, 2017
November 20-22, 2017
November 27, 2017
November 27-29, 2017
December 04, 2017
December 04-06, 2017
December 11, 2017
December 11-13, 2017
December 18, 2017
December 18-20, 2017
December 26, 2017
December 26-27, 2017
January 01, 2017
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), provided that
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.
6. Issue Price
Price of the Bonds shall be
fixed in Indian Rupees 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 three business 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 paid through digital mode.
The Bonds shall bear interest at
the rate of 2.50 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.
8. Receiving Offices
Scheduled Commercial 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.
9. Payment Options
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 Gold 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 previous 3 business days
from the date of repayment, published by the India Bullion and Jewelers
Association Limited. The receiving office shall inform the investor of the
date of maturity of the Gold Bond one month before its maturity.
RBI/depository shall inform the
investor of the date of maturity of the Bond one month before its maturity.
12. Eligibility for Statutory
Liquidity Ratio (SLR)
The holding of these Bonds by
banks as collateral shall be counted towards Statutory Liquidity Ratio
13. 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.
14. Tax Treatment
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. The receiving office shall issue an
acknowledgment receipt in Form ‘B’ to the applicant.
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.
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.
18. Tradability of bonds
The Bonds shall be eligible for
trading from such date as may be notified by the Reserve Bank of India.
19. 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
20. 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.
21. Operational guidelines
relating to Sovereign Gold Bonds are issued vide circular
IDMD.CDD.No.927/14.04.050/2017-18 dated October 06, 2017.
Deputy General Manager
Encls.: As above.