RBI/2016-17/235

IDMD.CDD.No.2188/14.04.050/2016-17

February 23, 2017

The Chairman & Managing Director

All Scheduled Commercial Banks

(Excluding RRBs)

Designated Post Offices

Stock Holding Corporation of India ltd.(SHCIL)

National Stock Exchange of India Ltd. & Bombay Stock Exchange Ltd.

Dear Sir/Madam,

Sovereign Gold Bonds, 2016-17 – Series IV - Operational Guidelines

This has reference to the GoI notification F.No. 4(16)-B(W&M)/2016 and RBI circular IDMD.CDD.No.2187/14.04.050/2016-17 dated February 23, 2017 on the Sovereign Gold Bonds, 2016-17-Series IV. FAQs in this regard have been placed on our website (www.rbi.org.in). Operational guidelines with regard to this scheme are given below:

1. Application

Application forms from investors will be received at branches during normal banking hours from February 27, 2017 to March 03, 2017. Receiving Offices need to ensure that the application is complete in all respects as incomplete applications are liable to be rejected. Relevant additional details may be obtained from the applicants, where necessary. The Receiving Offices may make arrangements to enable the investors to apply online, in the interest of better customer service.

2. Joint holding and nomination

Multiple joint holders and nominees (of first holder) are permitted. Necessary details may be obtained from the applicants as per practice.

3. Know-Your-Customer (KYC) requirements

Know-Your-Customer (KYC) norms shall be the same as that for purchase of physical form of gold. Identification documents such as passport, Permanent Account Number (PAN) Card, Voter's Identity Card, Aadhaar card shall be required. In case of minors only, the bank account number may also be considered as valid for KYC verification. KYC will be done by the issuing banks/SHCIL offices/Post Offices/agents.

4. Interest on application money

Applicants will be paid interest at prevailing savings bank rate from the date of realization of payment to the settlement date, i.e. the period for which they are out of funds. In case the applicant’s bank account is not with the receiving bank, the interest has to be credited by electronic fund transfer to the account details provided by the applicant.

5. Cancellation

Cancellation of application is permitted till the closure of the issue, i.e., March 03, 2017. Part cancellation of submitted request for purchase of gold bonds is not permitted. No interest on application money needs to be paid if the application is cancelled.

6. Lien marking

As the bonds are government securities, lien marking, etc. will be as per the extant legal provisions of Government Securities Act, 2006 and rules framed there under.

7. Agency arrangement

Scheduled Commercial Banks may engage NBFCs, NSC agents and others to collect application forms on their behalf. Banks may enter into arrangements or tie-ups with such entities. Commission for distribution shall be paid at the rate of rupee one per hundred of the total subscription received by the receiving offices on the applications received 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.

8. Processing through RBI’s e-Kuber system

Sovereign Gold Bonds will be available for subscription at the branches of scheduled commercial banks and designated post offices through RBI’s e- Kuber system. The e-Kuber system can be accessed either through Infinet or Internet. The Receiving Offices need to enter the data or carry out bulk upload for the subscriptions received by them. They may ensure accuracy of entry of data to prevent occurrence of any inadvertent errors. An immediate confirmation will be provided to them for receipt of application. In addition, a confirmation scroll will be provided for file uploads to enable the Receiving Offices to update their database. On the date of allotment, i.e., March 17, 2017, Certificates of Holding will be generated for all the subscriptions in the name of the sole/principal holder. The Receiving Offices can download the same and take printouts. The Certificates of Holding will also be sent through e-mail to the investors who have provided their email address. The securities will be credited in their de-mat accounts within 2-3 days of allotment, subject to matching of particulars furnished in the application with the Depositories’ records.

9. Printing Certificates of Holding

Holding Certificate needs to be printed in colour on A4 size 100 GSM paper.

10. Servicing and follow up

Receiving Offices, i.e., branches of the Scheduled Commercial Banks, designated post offices, SCHIL and stock exchanges (NSE Ltd and BSE) will “own” the customer and provide necessary services with regards to this bond e.g. update contact details, receive requests for premature encashment, etc. Receiving Offices will be required to preserve applications till the bonds are matured and are repaid.

11. Tradability

The Bonds shall be eligible for trading on a date notified by the Reserve Bank of India. (It may be noted that only bonds held in demat form with depositories can be traded in stock exchanges)

12. Contact details

Any queries/clarifications may be e-mailed to the following:

(a) Sovereign Gold Bond related: Please click here to send email.

(b) IT related: Please click here to send email

Yours faithfully,

 

(Rajendra Kumar)

General Manager

Sovereign Gold Bond subscription rules detail application, KYC, e Kuber processing, interest, tradability provisions and commission sharing. Operational guidelines for Sovereign Gold Bonds, 2016-17 Series IV set subscription procedures, KYC standards, interest on application money, cancellation rules and processing through RBI's e Kuber. Bonds are government securities subject to lien marking, issued as Certificates of Holding in the principal holder's name and credited to demat accounts after allotment. Receiving offices - banks, designated post offices, SHCIL and exchanges - handle servicing, may appoint agents with commission sharing, preserve applications until maturity, and bonds become tradable only when held in dematerialised form.