Sovereign Gold Bond Scheme 2020-21

[Sovereign Gold Bond Scheme 2020-21][1]

[9th October, 2020]

In exercise of the powers conferred by clause (iii) of Section 3 of the Government Securities Act, 2006 (38 of 2006), the Central Government hereby makes the following Scheme, namely:

Scheme - 1. Short title and commencement.

(i)       This scheme may be called the Sovereign Gold Bond Scheme 2020-21.

(ii)      There will be a distinct Series (starting from Series VII) for every tranche which will be indicated on the Bond issued to the investor.

(iii)     It shall come into force on the date of its publication in the Official Gazette.

Scheme - 2. Definition.

In this Scheme, unless the context otherwise requires:

(a)      “Form” means a form appended to this Scheme.

(b)      “Receiving office” means the offices or branches of Scheduled Commercial Banks (as specified in Annexure I to this Notification), designated Post Offices (as specified in Annexure II to this Notification), Stock Holding Corporation of India Ltd. (SHCIL) and the authorised stock exchanges as specified in Annexure III to this Notification.

(c)      “Stock Certificate” means the Gold Bond issued in the form of Government of India Stock in accordance with Section 3 of the Government Securities Act, 2006.

Scheme - 3. Eligibility for Investment.

The Gold Bonds under this Scheme may be held by a Trust, HUFs, Charitable Institution, University or 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.

Explanation For the purposes of this paragraph:

(i)       “person” shall have the same meaning as defined in clause (u) of Section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).

 

(ii)      the expression “person resident in India” shall have the same meaning as defined in clause (v) of Section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).

 

(iii)     “Trusts” to mean a trust constituted/formed as per the Indian Trusts Act, 1882, or a public or private trust constituted or recognized under the provisions of any Central or State law for the time being in force and also an express or constructive trust constituted for either a public religious or charitable purpose or both which includes a temple, a math, a wakf, a church, a synagogue, anagiary or any other place of public religious worship, or a dharmada or any other religious or charitable endowment and also a society, formed either for a religious or charitable purpose or for both, registered under the Societies Registration Act, 1860 or under any other law for the time being in force in India.

 

(iv)    “Charitable Institution” to mean a Company registered under Section 25 of the Indian Companies Act, 1956 or under Section 8 of the Companies Act, 2013; or an institution, which has obtained a Certificate of Registration as a charitable institution in accordance with a law in force; or Any institution which has obtained a certificate from an Income Tax Authority for the purposes of Section 80-G of the Income Tax Act, 1961.

 

(v)      “University” means a university established or incorporated by a Central, State or Provincial Act, and includes an institution declared under Section 3 of the University Grants Commission Act, 1956 (3 of 1956), to be a university for the purposes of the Act.

Scheme - 4. Denomination, Subscription limit and Pricing.

(i)       The bonds will be issued in denominations of one gram of gold or multiples thereof;

Provided that the minimum limit of subscription for the Bonds issued shall be of one gram and maximum limit of subscription per fiscal year shall be 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;

Provided that in case of joint holding, the above limits shall be applicable to the first applicant only;

Provided that the annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market; and

Provided further that the ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

(ii)      The nominal value of Gold Bonds shall be in Indian Rupees fixed on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited, for the last 3 working days of the week preceding the subscription period.

 

(iii)     The issue price of the Gold Bonds will be Rs. 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.

Scheme - 5. Procedure for making application for subscription to Gold Bonds.

(i)       Any person who is desirous of subscribing to the Gold Bonds shall apply to any receiving office in Form ‘A’ or in any other form as near as thereto, stating clearly the grams of gold, full name and address of the applicant/s.

(ii)      Every application shall contain such documents and particulars as specified in the instructions contained in the Application Form.

(iii)     Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to Individuals and other entities.

(iv)    On receipt of an application under sub paragraph (i), the receiving office shall issue an acknowledgment receipt in Form ‘B’, if all requirements of the application are fulfilled.

(v)      An incomplete application is liable to be rejected.

Scheme - 6. Date and form of issue of Gold Bonds.

(i)       The Gold Bonds shall be issued in the form of a Stock Certificate, as specified in Form ‘C’.

(ii)      The Gold Bonds shall be eligible to be converted into Demat form.

Scheme - 7. Period of subscription.

The Subscription of the Gold Bonds under this Scheme shall be open as specified in Section 8 below.

Provided that the Central Government may, with prior notice, close the Scheme at any time before the period specified above.

Scheme - 8. Calendar of Issuance.

Scheme - 9. Interest.

(i)       The interest on the Gold Bonds shall commence from the date of issue and shall be paid at a fixed rate of 2.50 per cent per annum on the nominal value of the bond.

(ii)      The interest shall be payable in half-yearly rests and the last interest shall be payable along with the principal on maturity.

Scheme - 10. Receiving Offices.

The receiving offices shall be authorised to receive applications for the bonds either directly or through agents.

Scheme - 11. Payment Options.

(i)       All payments for Gold Bonds shall be accepted in Indian Rupees through cash (up to a maximum of Rs. 20,000/-) or demand draft, or cheque, or electronic banking.

(ii)      Where payment is made through cheque or demand draft, the same shall be drawn in favour of the receiving office.

Scheme - 12. Redemption.

(i)       The Gold Bonds shall be repayable on the expiration of eight years from the date of the issue of the Bonds:

Provided that premature redemption of Gold Bonds may be permitted after fifth year from the date of issue of Bonds and such repayments will be made on next interest payment date.

(ii)      On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 working days, published by the India Bullion and Jewelers Association Limited.

 

(iii)     The RBI/depository shall inform the investor one month in advance, about the date of maturity of the Bond.

Scheme - 13. Eligibility for Statutory Liquidity Ratio.

Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.

Scheme - 14. Loan against Bonds.

(i)       The Gold Bonds issued under this Scheme may be used as collateral security for availing any loan. Such loans could be granted by marking lien on SGB appropriately.

(ii)      The Loan to Value ratio as applicable to any ordinary gold loan mandated by the Reserve Bank of India shall also apply to the Bonds issued under this Scheme.

Note: The loan against SGBs would be subject to decision of the bank/financing agency, and cannot be inferred as a matter of right.

Scheme - 15. Tax Treatment.

The interest on the Gold Bond shall be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961).

The capital gains tax arising on redemption of these bonds to an individual is exempted. The indexation benefits will be provided to long-term capital gains arising to any person on transfer of bond.

Scheme - 16. Nomination.

(i)       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 the 1st December 2007.

(ii)      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 the Non-Resident investor shall need to hold the security till early redemption or till maturity;

Provided further that the interest and maturity proceeds of the investment shall not be repatriable.

Scheme - 17. Transfer of Gold Bonds.

The Gold Bonds issued in the form of Stock Certificate are 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.

Scheme - 18. Trading of Gold Bonds.

The Gold Bonds shall be eligible for trading.

Scheme - 19. Commission for mobilizing subscription.

The commission for mobilising subscription towards these bonds shall be paid at the rate of Rupee one per hundred Rupees of the total subscription received by the receiving offices 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.

Scheme - 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 4(2)-(W&M)/2018 dated the 27th March, 2018 shall apply to the Gold Bond issued under this scheme.

Form ‘A’

In case of thumb impression, attestation by two witnesses

 

 

H.U.F. declaration (mandatory, if applicant is Karta of HUF)

I,……………………………………………………………,residing at the address given against First Applicant, do solemnly affirm that I am the Karta of the Hindu Undivided Family and as such have full powers to sell, endorse, transfer or otherwise deal in the Sovereign Gold Bonds 2020-21, standing in the name of the HUF.

Specimen signature for and on behalf of the HUF (name of the HUF) ………………………………………

Place:

Date:(Signature of the Karta with seal of HUF)

For Office use only

Part of Form A

Information for Investors of Sovereign Gold Bond 2020-21

Instructions for Investors/Applicants

(a)      Application should be complete in all respects.

 

(b)      Incomplete applications may be rejected or delayed till full particulars are available.

 

(c)      In case the application is submitted by a Power of Attorney (POA) holder, please submit original POA for verification, along with an attested copy.

 

(d)      In case the application is on behalf of a minor, please submit the original birth certificate from the School or Municipal Authorities for verification, together with an attested copy.

 

(e)      Please note that nomination facility is available to a Sole Holder or all the joint holders (investors) of an SGB.

 

(f)       In case nominee is a minor, please indicate the date of birth of the minor and a guardian can be appointed.

 

(g)      Nomination facility is not available in case the investment is on behalf of minor.

 

(h)     Please provide bank account details for receiving payment through Electronic mode.

 

(i)       Please notify the change of bank account, if any, immediately.

 

(j)       POST MATURITY INTEREST IS NOT PAYABLE.

 

(k)      Indicate your date of birth.

Rights of the Investors

(a)      Holding Certificate will be issued to the investor.

 

(b)      The interest on the bond is paid half-yearly. The servicing of the Interest will be done through the bank account provided in the Application form or through the A/c linked to the demat, as the case may be.

 

(c)      Application forms for investments under Sovereign Gold Bonds 2020-21 are available on the website at 

(d)      A sole holder or all the joint holders may nominate maximum of two nominees to the rights of the bonds.

 

(e)      The nomination will be registered at the Office of Issue and a Certificate of Registration will be issued to the holder.

 

(f)       The nomination can be altered by registering a fresh nomination.

 

(g)      The existing nomination can be cancelled by a request to the Office of Issue.

 

(h)     The investor is entitled to receive repayment amount within five clear working days from the date of tender of application for early redemption.

 

(i)       In case the bank does not comply with the above, you may lodge a complaint in writing in to the nearest office of Reserve Bank of India as under:

THE REGIONAL DIRECTOR,

RESERVE BANK OF INDIA,

CONSUMER EDUCATION AND PROTECTION DEPARTMENT/

BANKING OMBUDSMAN

(LOCATION)

--

YOU MAY ALSO ADDRESS YOUR COMPLAINT TO:

THE CHIEF GENERAL MANAGER

INTERNAL DEBT MANAGEMENT DEPARTMENT

CENTRAL OFFICE

FORT, MUMBAI-400 001, MAHARASHTRA

Disclaimer: - I have read and understood the details of information for the investors as well as rights and duties of investors. The agent/bank has explained the features of the scheme to me.

Signature of the applicant

Form ‘B’

[See Paragraph 5(4)]

Acknowledgement Receipt

Application No………………………….

Date ………/………/…………………

Received from Mr/Mrs/Ms…………………………………………………………………………………Cash/Demand Draft/Cheque No./Electronic Transfer/……………………………………………… dated ……/………/…… drawn on (Bank and branch) ……………………………………………………………… ………………………… for ___ grams totaling an amount of Rs……………… (Rupees………………… …………………..…………………………… only) for the purchase of Sovereign Gold Bond 2020-21 - Series VII/VIII/IX/X/XI/XII for a period of 8 years, interest payable on basis of the nominal value of Rs. ……………………. (Rupees …………………………………………………….only).

Form ‘C’

[See paragraph 6 (1)]

Government of India

SOVEREIGN GOLD BOND 2020-21

Certificate Number:

I hereby certify that, Smt. /Shri is the registered holder of  units of Sovereign Gold Bond 2020-21 - Series VII/VIII/IX/X/XI/XII. The Sovereign Gold Bond 2020-21 - Series VII/VIII/IX/X/XI/XII will bear interest at -per cent per annum on initial investment of -, payable at half-yearly intervals on - -and - every year. The Bonds are redeemable on  with the option for early redemption after fifth year on next interest payment dates.

Application Receiving Office

This is a system generated certificate and does not require any signature.

Form ‘D’

[See paragraph 16]

NOMINATION

I/We …………………………………………………………… (Name and address), the holder/s of Stock certificate/BLA No………………for the loan……………….. here by nominate the following person/s who shall on my/our death have the right to the Government securities/Bonds and receive payment of the amount for the time being due on the Government securities/Bonds specified below:

PARTICULARS OF NOMINEE:

To be filled in case if nominee is minor: As………………………………………. the sole nominee above is a minor on this date, I/We appoint Shri/Smt./Kumari …………… ……………………………… to receive the amount for the time being.

Due to the above Government securities/Bond in the event of my/our death during the minority of the said nominee…

If the nomination is in substitution of the one already made: This nomination is in substitution of the nomination dated…………………made by me/us and registered on your books at………………………..which shall stand cancelled on registration of this nomination.

Place:(Signature(s) of the Stock Certificate holder(s)/BLA holder(s))

Date:__

Signature with name and address of witnesses:

Acknowledgment

We acknowledge having registered the nomination in favour of……………………… (Name of nominees) for the Stock Certificate/BLA No.……………………for the loan……………………… and the nomination registration No. is………………… Please quote the above nomination registration No. in all communication pertaining to change or cancellation of nomination.

Date:………………….Authorised Official……………………..

Form ‘E’

[See paragraph 16]

CANCELLATION OF NOMINATION

I/We………………………………………(name and address) do here by cancel the nomination dated…………………………made by me/us in respect of the following Stock certificate/Bond Ledger Account No., and registered by the Public Debt Office/branch of the Agency bank on……………………(date) vide Registration No.…………………

Particulars of the Stock Certificate/Bonds

Place:______(Signature(s) of the Stock Certificate holder(s)/.

Date:______BLA holder(s))

Signature with name and address of witnesses:

Acknowledgment

We acknowledge having cancelled the nomination in favour of ……………………… (Name of Nominees) for the Stock Certificate/BLA No.……………………for the loan ………………………noted vide our nomination registration no.…………….. Dated…………………

Date:………………….Authorised Official……………………..

Form ‘F’

[See paragraph 17]

TRANSFER OF STOCK CERTIFICATES

I/We* …………………………. (transferor/s) do hereby assign and transfer my/our* interest or share in the inscribed stock certificate number……………..of ………… per cent Government Loan of ……………. amounting to Rs. ……… being the amount/a portion of the stock for Rs.……… as specified on the face of this instrument together with the accrued interest thereon to ……………………….(transferee/s), his/her/their* executors, administrators or assigns, and I/We* …….………… do freely accept the stock certificate number ……………….to the extent it has been transferred tome/us*.

I/We*……………………….(transferee/s) hereby request that on my/our*being registered as the holder/s of the stock transferred to me/us*, the above stock certificate to the extent it has been transferred to me/us* may be renewed in my/our*name (s)/converted in my/our*name(s).

I/We*……………………….(transferor/s) hereby request that on the above transferee(s) being registered as the holder/s of the stock hereby transferred to him/them*, the aforesaid stock certificate to the extent it has not been transferred to him/them*may be renewed in my/our* name(s).

As witness, our hand the …………… day of …………… two thousand and ………………

Delete whichever is not applicable.

This paragraph is to be used only when a portion of the Certificate is transferred.

Signature, occupation and address of witness. Witness should be different for Transfer or and transferee.

Transferred:

Stock Certificate issued No/s………………….dated……………………………..

Manager, Reserve Bank of India,…………………………..

Annexure I

(Refer to para 2(b) of notification dated October 09, 2020)

List of Scheduled Commercial Banks

 

Annexure-II

(Refer to para 2(b) of notification dated October 09, 2020)

List of Post Offices is provided in the Press Release of Reserve Bank of India dated October 09, 2020 at www.rbi.org.in

Annexure III

(Refer to para 2(b) of notification dated October 09, 2020)

List of recognised stock exchanges authorised as receiving offices for the Sovereign Gold Bonds 2020-21

(1)     National Stock Exchange of India Ltd. (NSE)

(2)     Bombay Stock Exchange Ltd. (BSE)