Page 52 - Banking Finance December 2017

RBI CIRCULAR

eight years from the date of issue of Gold bonds. Instrument of transfer as in Form 'F', in accordance with
Pre-mature redemption of the Bond is permitted the provisions of the Government Securities Act, 2006
from fifth year of the date of issue on the interest (38 of 2006) and the Government Securities
payment dates. Regulations, 2007, published in part III, Section 4 of the

ii) The redemption price shall be fixed in Indian Gazette of India dated December 1, 2007.
Rupees and the redemption price shall be based 18. Tradability of bonds
on simple average of closing price of gold of 999 The Bonds shall be eligible for trading from such date
purity of previous 3 business days from the date of as may be notified by the Reserve Bank of India.
repayment, published by the India Bullion and 19. Commission for distribution
Jewelers Association Limited.
Commission for distribution shall be paid at the rate of
11. Repayment rupee one per hundred of the total subscription
RBI/depository shall inform the investor of the date of received by the receiving offices on the applications
maturity of the Bond one month before its maturity. received and receiving offices shall share at least 50%

12. Eligibility for Statutory Liquidity Ratio (SLR) of the commission so received with the agents or sub-
The holding of these Bonds by banks as collateral shall agents for the business procured through them.
be counted towards Statutory Liquidity Ratio holding. 20. All other terms and conditions specified in the
13. Loan against Bonds notification of Government of India in the Ministry of
The Bonds may be used as collateral for loans. The Loan Finance (Department of Economic Affairs) vide number
to Value ratio will be as applicable to ordinary gold loan F. No.4(13) W&M/2008, dated 8th October 2008 shall
mandated by the RBI from time to time. The lien on apply to the Bonds.
the Bonds shall be marked in the depository by the
21. Operational guidelines relating to Sovereign Gold Bonds
authorized banks.
are issued vide circular IDMD.CDD.No.927/14.04.050/
14. Tax Treatment 2017-18 dated October 06, 2017.
Interest on the Bonds shall be taxable as per the
provisions of the Income-tax Act, 1961. The capital Yours faithfully,
gains tax arising on redemption of SGB to an individual (Shyni Sunil)
has been exempted. The indexation benefits will be Deputy General Manager
provided to long term capital gains arising to any
person on transfer of bond
Interest rates for Small Savings Schemes
15. Applications
Subscription for the Bonds may be made in the RBI/2017-18/74
prescribed application form (Form 'A') or in any other DGBA.GBD.954/15.02.005/2017-18
form as near as thereto stating clearly the grams of
gold and the full name and address of the applicant. 1. Please refer to our circular DGBA.GBD.69/15.02.005/
The receiving office shall issue an acknowledgment 2017-18 dated July 13, 2017 on the above subject. The
receipt in Form 'B' to the applicant. Government of India, had vide their Office
16. Nomination Memorandum (OM) No.F.No.01/04/2016-NS dated
Nomination and its cancellation shall be made in Form September 29, 2017 has stated that the interest rates
'D' and Form 'E', respectively, in accordance with the on small savings schemes for the third quarter of
provisions of the Government Securities Act, 2006 (38 financial year 2017-18 starting 1st October, 2017 shall
of 2006) and the Government Securities Regulations, remain unchanged from those notified for the second
2007, published in part III, Section 4 of the Gazette of quarter of FY 2017-18 (copy enclosed).
India dated December 1, 2007. 2. The contents of this circular may be brought to the
17. Transferability notice of the branches of your bank operating
The Bonds shall be transferable by execution of an Government Small Saving Schemes for necessary

52 | 2017 | DECEMBER | BANKING FINANCE

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