23-February-2017 11:15 IST
Government to issue Sovereign Gold
Bonds 2016 -17 – Series IV; Applications for the bond to be accepted from
February 27, 2017 to March 03, 2017
Government
of India, in consultation with the Reserve Bank of India(RBI), has decided to
issue Sovereign Gold Bonds 2016-17–Series IV. Applications for the bond will be
accepted from February 27, 2017 to March 03, 2017. The Bonds will be issued on
March 17, 2017. The Bonds will be sold through banks, Stock Holding Corporation
of India Limited (SHCIL), designated post offices and recognised stock
exchanges viz., National Stock Exchange of India Limited and Bombay Stock
Exchange.
The
features of the Bond are given below:
|
Sl. No.
|
Item
|
Details
|
|
1
|
Product name
|
Sovereign
Gold Bond 2016-17 – Series IV
|
|
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 grams 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
|
Interest
rate
|
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
|
