Sl. No.
Item
Details
1
Product name
Sovereign
Gold Bond 2017-18 – Series II
2
Issuance
To
be issued by Reserve Bank India on behalf of the Government of India.
3
Eligibility
The
Bonds will be restricted for sale to resident Indian entities including
individuals, HUFs, Trusts, Universities and Charitable Institutions.
4
Denomination
The
Bonds will be denominated in multiples of gram(s) of gold with a basic
unit of 1 gram.
5
Tenor
The
tenor of the Bond will be for a period of 8 years with exit option from 5th
year to be exercised on the interest payment dates.
6
Minimum size
Minimum
permissible investment will be 1 gram of gold.
7
Maximum limit
The
maximum amount subscribed by an entity will not be more than 500 grams per
person per fiscal year (April-March). A self-declaration to this effect will
be obtained.
8
Joint holder
In
case of joint holding, the investment limit of 500 grams will be applied to
the first applicant only.
9
Issue price
Price
of Bond will 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
Jewellers Association Limited for the week (Monday to Friday) preceding the
subscription period. The issue price of the Gold
Bonds will be ` 50 per gram less than the nominal value.
10
Payment option
Payment
for the Bonds will be through cash payment (upto a maximum of Rs. 20,000) or
demand draft or cheque or electronic banking.
11
Issuance form
The
Gold Bonds will be issued as Government of India stocks under GS Act, 2006.
The investors will be issued a Holding Certificate for the same. The Bonds
are eligible for conversion into demat form.
12
Redemption price
The
redemption price will be in Indian Rupees based on previous week’s
(Monday-Friday) simple average of closing price of gold of 999 purity
published by IBJA.
13
Sales channel
Bonds will
be sold through banks, Stock Holding Corporation of India Limited (SHCIL),
designated post offices as may be notified and recognised stock exchanges
viz., National Stock Exchange of India Limited and Bombay Stock Exchange,
either directly or through agents.
14
The
investors will be compensated at a fixed rate of 2.50 per cent per annum
payable semi-annually on the nominal value.
15
Collateral
Bonds can be used as
collateral for loans. The loan-to-value (LTV) ratio is to be set equal to
ordinary gold loan mandated by the Reserve Bank from time to time.
16
KYC Documentation
Know-your-customer (KYC)
norms will be the same as that for purchase of physical gold. KYC documents
such as Voter ID, Aadhaar Card/PAN or TAN /Passport will be required.
17
Tax treatment
The interest on Gold
Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of
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
18
Tradability
Bonds will be tradable on
stock exchanges within a fortnight of the issuance on a date as notified by
the RBI.
19
SLR eligibility
The Bonds will be
eligible for Statutory Liquidity Ratio purposes.
20
Commission
Commission for
distribution of the bond shall be paid at the rate of 1% 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.
