The Reserve Bank of India (RBI) on October 22, 2021 has issued Procedural Guidelines for Sovereign Gold Bond Scheme of Government of India (GoI).
The consolidated Guidelines are as followed:
• Procedural Guidelines for servicing the bonds:
o Application
(i) ROs are authorized to receive Application forms from eligible investors at the branches either directly or through agents. Applications shall be received at branches during normal banking hours on the weeks of subscription as notified by GOI/RBI from time to time. Subscription of the from shall be made in prescribed application Form A.
(ii) Every application must be accompanied by the ‘PAN details’ issued by the Income Tax Department to the investor(s). Relevant additional details may be obtained from the applicants, where necessary.
(ii) The Investor ID generated from RBI’s E-Kuber is a unique id which is created while applying for SGB or Inflation Indexed National Savings Securities- Cumulative, 2013 (IINSC-C). In case the applicant already has an investor ID issued by RBI’s E-Kuber portal for above investment in any of the earlier tranches, the same should invariably be quoted by investor while making any subsequent applications.
(iii) While accepting applications, ROs may ascertain from the applicant the details of existing investor ID if any. In case of failure to quote the same, the E-Kuber portal shall reject the application, while uploading the same.
(iv) All payments for subscription to SGB shall be accepted in Indian Rupees through cash up to a maximum of Rs.20,000/- or cheque/ demand drafts/electronic banking. The cheque/ demand drafts shall be drawn in favour of the RO. The payments for applications received for SGBs to be held in RDG Account shall be made through electronic banking only.
(v) ROs need to ensure that the application is complete in all respects as incomplete applications are liable to be rejected.
(vi) The ROs may make arrangements to enable the investors to apply online, in the interest of better customer service. While providing online services, it is the responsibility of ROs to ensure that all relevant fields for capturing details of applicant, mode of holding and other details as per the terms and conditions specified in Notification are duly provided for. All online applications should be accompanied by email Id of the investor/s which should be uploaded on the Ekuber portal along with the subscription details.
(vii) On receipt of complete application as above, the ROs shall issue an acknowledgement receipt in Form B.
(vii) An incomplete application is liable to be rejected if all the requirements of the application are not fulfilled within the period specified for subscription.
(viii) The cancellation of bonds is permitted till the closure of issue. However, no part cancellation of the application is permitted. No request for cancellation of the bond after closure of the issue shall be entertained under any circumstances.
(ix) The ROs are required to enter the data or carry out bulk upload for the subscriptions received by them in RBI’s E-Kuber portal. They shall ensure accuracy of data to prevent occurrence of any inadvertent errors. An immediate confirmation will be provided to them for receipt of application. In addition, a confirmation scroll will be provided for file uploads to enable the ROs to update their database.
(x) The applicants are eligible for payment of interest on the subscription amount at savings bank rate from the date of application/realisation of fund up to the date of allotment i.e. the period for which the investor is out of funds. No interest is payable, in case the application is rejected for any reason attributable to the investor.
(xi) The status of application rejected by RBI’s E-Kuber system should be notified by ROs and subscription amount refunded without any delay to the customer.
(xii) Any delay on the part of ROs to refund the amount to any applicant, whose application is rejected will attract penalty @ Repo rate +2% for each day of delay.
• Allotment of Bonds and Generation of “Certificates of Holding (COH)”:
(i) On the date of allotment, the “Certificates of Holding” are generated for all the successful subscriptions by RBI. These are sent to the customers who have provided their e-mail Ids. The ROs can also download the certificates from RBI’s E-Kuber portal and are required to provide the same to their customers. The Certificate of Holding may be printed in colour on A4 size 100 GSM paper in the prescribed Form C.
(ii) ROs may note that as SGB is transferable/tradable and mere possession of Certificate of Holding should not be construed as proof of title.
• Nomination
(i) Nomination and its cancellation shall be governed by Section 9 of the Government Securities Act, 2006 read with Chapter III of the Government Securities Regulations, 2007. The nominations can be indicated by the customer at the time of subscribing to the bonds (in the prescribed Form 'D' or at a later date. It is permissible to designate more than one person as nominees (maximum two) to a bond. Nomination facility is not available in case the investment is on behalf of minor.
(ii) Cancellation of Nomination: The holder of a Sovereign Gold Bond may apply for cancellation of an existing nomination in the prescribed Form 'E' and while examining the application it may be ensured that - (i) correct particulars of the Sovereign Gold Bond have been stated in the form; and (ii) the name/s of the nominee/s has/have been correctly mentioned in the form
(iii) Additions to existing nomination: The holder can nominate second person, in addition to the existing one. On submission of a fresh nomination in Form 'D', it may be examined and dealt with in the same way as the original nomination. In case of bonds held as stock certificates, the RO shall input such requests (cancellation/addition) into the E-Kuber system subject to its satisfaction that the details provided are correct and in order, using the facility provided in the E-Kuber portal. Acknowledgement may also be issued.
(iv) Claims of nominee/s: 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 RO/Depository, as the case may be, it may recognize the claim in terms of Section 9 of the GS 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 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. If the claim is found to be in order, the name/s of the nominee/s will be substituted as the bond holder/s in place of the deceased holder - and a fresh Certificate of Holding will be issued under proper authentication. In the event of doubt the case may be referred to PDO, Mumbai by the RO/Depository.
• Transfer of Bonds
(i) The Bonds are issued in the form of Stock Certificate and are therefore transferable before maturity to eligible transferees either wholly or in part by execution of an instrument of transfer in Form 'F', in case of bond held in the Bond Ledger Account in accordance with the provisions of the Government Securities Act, 2006 and the Government Securities Regulations, 2007.
(ii) In case of bond held in demat account with the NSDL/CDSL, the Beneficial ownership of dematerialised bonds can change either through trading in exchanges /off market transactions as per the extant practice.
• Loan against the bonds and creation of pledge, hypothecation or lien.
(i) The bonds may be used as collateral security for any loan. The creation of pledge, hypothecation or lien on the bonds shall be governed by Section 28 of the Government Securities Act, 2006 and Chapter VII of the Government Securities Regulations, 2007.
(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.
(iii) The pledge/hypothecation/lien on the bond held in stock certificate form shall be recorded and revoked by the banks providing the loan, in accordance with the provisions of section 28 of GS Act and Chapter VII of GS Regulations, using the facility provided in the E-Kuber portal. The lien marking rights in case of bonds held in BLA is provided to the ROs, who can do the same through E-Kuber portal of RBI.
(iv) In case of bonds held with the depositories and in RDG account under RBI Retail Direct Scheme, the lien is marked by the CSGL holder in line with the practice followed for other stocks and shares which are accepted as collateral by the banks. The detailed procedure for marking of lien is provided in the user manual on our website.
(v) In the event of the bank invoking the pledge/hypothecation/lien, after initiating the necessary entry In E-Kuber, the authorisation request for transfer of the bonds to the bank may be submitted to PDO, Mumbai through E-mail in accordance with the provisions of Chapter VII, Regulation 21 of the Government Securities Regulation 2007, with additional supporting documents including court order, if any.
• Payment of Interest
(i) The interest on the bonds, as applicable, shall be paid on a half yearly basis. The amount will be credited by RBI to the bank account of the holder of bonds in case of bond held in BLA and RDG Acount through electronic means on the date on which the interest is payable. Where the bonds are held with the depositories, the interest amount will be disbursed through depositories, who will arrange to credit the amount to the bank accounts of the holders (as available in their records) through electronic means on the due date.
(ii) In case, it is not possible to accord credit to the account of the beneficiary due to closure of bank account or otherwise, destination banks shall return the transaction to PDO Mumbai/RBI within two hours of completion of the batch in which the transaction was processed along with details of UTR number.
• Repayment of Bonds
RO/depository shall inform the investor about the date of maturity of the Bond one month before its maturity. The Bond shall be repayable on the expiration of eight years from the date of issue of the bond. No claim needs to be submitted to RBI for the purpose by the investors. Premature redemption of the bonds is permitted after five year from the date of issue of such bond, on the date on which the next interest is payable. The request for pre-mature redemption shall be submitted to the RO or Depository through DP (in case of dematerialized securities) at least 10 days before the next interest payment date. If the RO/Depository Participant/Depository so desires it can call for additional documents, KYC proof, declaration etc. The request shall be scrutinized to verify the correctness of the particulars and may be submitted to RBI through the E-Kuber Portal at least four days before the due date of interest. On maturity and in case of premature redemption, the 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 week (Monday to Friday) for SGBs issued under tranche 1 to 9 and previous three working days for tranches issued thereafter at the rate published by the India Bullion and Jewellers Association Limited. The redemption proceeds shall be credited to the bank account of the customer
*Disclaimer – Kindly refer to the link for detailed guidelines.
[Notification No. RBI/2021-2022/114 IDMD.CDD.1100/14.04.050/2021-22]
