|
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
|
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.
|