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Sl.
No.
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Item
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Details
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1
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Product name
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Sovereign Gold Bond 2016-17 – Series III
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2
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Issuance
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To be issued by Reserve Bank India on
behalf of the Government of India.
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3
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Eligibility
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The Bonds will be restricted for sale
to resident Indian entities including individuals, HUFs, Trusts, Universities
and Charitable Institutions.
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4
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Denomination
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The Bonds will be denominated in
multiples of gram(s) of gold with a basic unit of 1 gram.
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5
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Tenor
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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.
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6
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Minimum size
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Minimum permissible investment will be
1 grams of gold.
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7
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Maximum limit
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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.
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8
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Joint holder
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In case of joint holding, the
investment limit of 500 grams will be applied to the first applicant only.
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9
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Issue price
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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.
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10
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Payment option
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Payment for the Bonds will be through
cash payment (upto a maximum of Rs. 20,000) or demand draft or cheque or
electronic banking.
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11
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Issuance form
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Government of India Stock under GS
Act, 2006. The investors will be issued a Holding Certificate. The Bonds are
eligible for conversion into demat form.
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12
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Redemption
price
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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.
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13
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Sales channel
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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.
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14
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Interest rate
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The
investors will be compensated at a fixed rate of 2.50 per cent per annum
payable semi-annually on the nominal value of investment.
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15
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Collateral
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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.
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16
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KYC
Documentation
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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.
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17
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Tax treatment
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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
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18
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Tradability
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Bonds
will be tradable on stock exchanges/NDS-OM from a date to be notified by RBI.
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19
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SLR
eligibility
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The
Bonds will be eligible for Statutory Liquidity Ratio purposes.
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20
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Commission
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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.
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