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RBI issues operational guidelines for Sovereign Go

Reserve Bank of India on Wednesday said multiple joint holders and nominees (of first holder) are permitted under the Sovereign Gold Bonds, 2015-16, scheme.

In its operational guidelines for the Bonds, the RBI said necessary details in this regard should be obtained by scheduled commercial banks (excluding Regional Rural Banks) and designated Post Offices from the applicants as per practice.

Applicants will be paid interest at prevailing savings bank rate from the date of realization of payment to the settlement date, that is 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.

Cancellation of application is permitted till the closure of the issue -- November 20, 2015. Part cancellation of submitted request for purchase of gold bonds will not be permitted. No interest on application money will be paid if the application is cancelled.

The RBI said receiving offices, that is branches of the scheduled commercial banks and designated post offices 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.

The central bank said scheduled commercial banks may engage non-banking finance companies, National Savings Certificate agents and others to collect application forms on their behalf. Banks may enter into arrangements or tie-ups with such entities.

Sovereign Gold Bond will be issued by Reserve Bank India on behalf of the Government of India. The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions.

The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. 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. The investors will be issued a Stock/Holding Certificate. The Bonds are eligible for conversion into demat form

Minimum permissible investment will be 2 units (i.e. 2 grams of gold).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. The Bonds will be issued on November 26, 2015.

In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only. The issue price of the Sovereign Gold Bond for this tranche has been fixed 2684 per gram of gold.

Application forms from investors will be received at branches during normal banking hours from November 5 to 20, 2015.(Hindu Business)