Sovereign Gold Bonds

Sovereign Gold Bond Scheme 2019-20

Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds. The Sovereign Gold Bonds will be issued every month from October 2019 to March 2020 as per the calendar specified below:

S.No.	Tranche	Date of Subscription	Date of Issuance
1	2019-20 Series V	October 07-11, 2019	October 15, 2019
2	2019-20 Series VI	October 21-25, 2019	October 30, 2019
3	2019-20 Series VII	December 02–06, 2019	December 10, 2019
4	2019-20 Series VIII	January 13-17, 2020	January 21, 2020
5	2019-20 Series IX	February 03-07, 2020	February 11, 2020
6	2019-20 Series X	March 02-06, 2020	March 11, 2020

The Bonds will be sold through Scheduled Commercial banks (except Small Finance Banks and Payment 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 Limited.

The features of the Bond are:

Sl. No.	Item	Details
1	Product name	Sovereign Gold Bond 2019-20
2	Issuance	To be issued by Reserve Bank India on behalf of the Government of India.
3	Eligibility	The Bonds under this Scheme may be held by a person resident in India, being an individual, in his capacity as such individual, or on behalf of minor child, or jointly with any other individual. The bond may also be held by a Trust, HUFs, Charitable Institution and University. “Person resident in India” is defined under clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).
4	Form of Security	The Bonds shall be issued in the form of Government of India Stock in accordance with section 3 of the Government Securities Act, 2006. The investors will be issued a Holding Certificate (Form C). The Bonds shall be eligible for conversion into de-mat form.
5	Date of Issue	The date of issuance shall be as per the details given in above table.
6	Denomination	The Bonds shall be denominated in units of one gram of gold or multiples thereof. Minimum investment in the Bonds shall be one gram with a maximum limit of subscription per fiscal year of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the Government from time to time provided that i. in case of joint holding, the above limits shall be applicable to the first applicant only; ii. annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market; and iii.the ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.
7	Issue price	The nominal value of the Bonds shall be fixed in Indian Rupees fixed 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 last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.
8	Period of subscription	The Subscription of the Gold Bonds under this Scheme shall be open as specified in the above table. Provided that the Central Government may, with prior notice, close the Scheme at any time before the period specified above
9	Interest rate	The Bonds shall bear interest from the date of issue at the rate of 2.50 percent (fixed rate) per annum on the nominal value. Interest shall be paid in half-yearly rests and the last interest shall be payable along with principal on maturity.
10	Receiving Offices	Scheduled Commercial Banks (excluding RRBs, Small Finance Banks and Payment Banks), designated Post Offices (as may be notified), Stock Holding Corporation of India Ltd (SHCIL) and recognized stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Ltd. are authorized to receive applications for the Bonds either directly or through agents.
11	Payment option	Payment shall be accepted in Indian Rupees through cash up to a maximum of ₹ 20,000/- or Demand Drafts or Cheque or Electronic banking. Where payment is made through cheque or demand draft, the same shall be drawn in favour of the Receiving Office.
12	Redemption price	i) The Bonds shall be repayable on the expiration of eight years from the date of issue of the Bonds. Pre-mature redemption of the Bond is permitted after fifth year of the date of issue of the Bonds and such repayments shall be made on the next interest payment date. ii) The redemption price shall be fixed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of the previous 3 working days, published by the India Bullion and Jewelers Association Limited.
13	Repayment	RBI/depository shall inform the investor about the date of maturity of the Bond one month before its maturity.
14	Eligibility for Statutory Liquidity Ratio (SLR)	Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.
15	Loan against Bonds	The Bonds may be used as collateral for loans. The Loan to Value ratio will be as applicable to ordinary gold loan mandated by the RBI from time to time. The lien on the Bonds shall be marked appropriately in E-kuber portal by the Receiving Offices /Depository. The loan against SGBs would be subject to decision of the lending bank/institution, and cannot be inferred as a matter of right by the SGB holder.
16	Tax treatment	Interest on the Bonds shall be taxable as per the provisions of the 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.
17	Applications	Subscription for the Bonds may be made in the prescribed application form (Form ‘A’) or in any other form as near as thereto, stating clearly the grams of gold and the full name and address of the applicant. Every application must be accompanied by the ‘PAN details’ issued by the Income Tax Department to the investor(s). The Receiving Office shall issue an acknowledgment receipt in Form ‘B’ to the applicant.
18	Nomination	Nomination of and its cancellation shall be made in Form ‘D’ and Form ‘E’, respectively, in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated December 1, 2007. An individual Non - resident Indian may get the security transferred in his name on account of his being a nominee of a deceased investor provided that: i. the Non-Resident investor shall need to hold the security till early redemption or till maturity; and ii. the interest and maturity proceeds of the investment shall not be repatriable.
19	Transferability	The Bonds issued in the form of Stock Certificate shall be transferable by execution of an Instrument of transfer as in Form ‘F’, in accordance with the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated December 1, 2007.
20	Tradability of bonds	The Bonds shall be eligible for trading from such date as may be notified by the Reserve Bank of India.
21	Commission for mobilizing subscription	Commission for mobilizing subscription shall be paid at the rate of Rupee one per hundred of the total subscription received by the receiving offices and they shall share at least 50% of the commission so received with the agents or sub-agents for the business procured through them.
22	All other terms and conditions specified in the notification of Government of India in the Ministry of Finance (Department of Economic Affairs) vide number F.No.4(2)-(W&M)/2018, dated 27th March 2018 shall apply to the Bonds.

Frequently Asked Questions

What is Sovereign Gold Bond (SGB)? Who is the issuer?

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.