Sovereign Gold Bond Series IV
Reserve Bank of India vide their letter no.RBI/2018-19/192 IDMD.CDD.No.3392/
14.04.050/2018-19 dated May 30,2019 informing Government of India has vide its Notification F.No. 4(7)-(W&M)/2019 dated May 30,2019, announced the Sovereign Gold Bond Scheme2019-20 series IV will be opened for subscription from September 09,2019 to September 13,2019. 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 de-mat form.
3. Date of Issue
Date of issuance shall be September 09,2019 to September 13,2019.
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 five hundred gram per person per fiscal year (April – March).
5. Issue Price
The issue price of the Sovereign gold Bond for this tranche has been fixed at Rs.3890/- (Rupees three Thousand Eight Hundred ninety only) per gram of gold. The rate has been fixed on the basis of simple average of closing price of gold of 999 purity of previous week published by the India Bullion and Jewellers Association Limited (IBJA).
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.
7. 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 Limited are authorized to receive applications for the Bonds either directly or through agents.
8. Payment Options
Payment shall be accepted in Indian Rupees through Cash up to a maximum of Rs.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 on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by IBJA.
iii) The Receiving Office shall inform the investor of the date of maturity of the Gold Bond one month before its maturity.
The Receiving Office shall inform the investor of the date of maturity of the Bond one month before its maturity.
11. Eligibility for Statutory Liquidity Ratio (SLR)
Investment in the Bonds shall be eligible for SLR.
12. 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. 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.
13. 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.
17. Tradability of bonds
The Bonds shall be eligible for trading within 15 days of issuance on a date notified by the Reserve Bank of India.