Guidelines for applying the Sovereign Gold Bonds

The resident Indians (individuals, HUFs, Trusts, Universities, Charitable institutions, etc.,) as defined under FEMA Act 1999 are eligible to invest both in a single name or joint name. In the case of joint names, the buying limit applies to the first applicant. The bonds can also be purchased in the minor’s name.

Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond will be tradable on Exchanges if held in Demat form. It can also be transferred to any other eligible investor.

These Bonds are denominated in units of one gram of gold and multiples thereof. The minimum investment in the Bonds shall be one gram with a maximum limit of subscription 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 per fiscal year (April – March), provided that; (a)    in case of joint holding, the above limits shall be applicable to the first applicant only; (b)      annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the secondary market, and (c)      the ceiling on investment will not include the holdings as collateral by banks and other Financial Institutions.

The subscription for the Sovereign Gold Bonds (SGB) may be made in the prescribed application form Form A or in any other form as near as thereto, stating clearly the grams (in units) of gold. Every application must contain the full name and address of the applicant, accompanied by the ‘PAN details’, mode of holding (D’mat or Physical), and quantity of gold to be purchased (in grams). Also, the subscriber shall quote Investor ID no. The Investor ID is a unique id generated from RBI’s E-Kuber which is created while applying for SGB or Inflation Indexed National Savings Securities- Cumulative, 2013 (IINSC-C). In case the applicant already has an investor ID issued by RBI’s E-Kuber portal for the above investment in any of the earlier tranches, the same should invariably be quoted by the investor while making any subsequent applications. The incomplete applications are liable to be rejected while uploading to the E-Kuber portal. All payments for subscription to SGB shall be accepted in Indian Rupees through cash up to a maximum of Rs 20,000/-or cheque/ demand drafts/electronic banking. The cheque/ demand drafts shall be drawn in favour of the Receiving Office (RO).

The Scheduled Commercial Banks (excluding RRBs, Small Finance Banks, and Payment Banks), designated Post Offices, Stock Holding Corporation of India Ltd (SHCIL), National Stock Exchange of India Limited, and Bombay Stock Exchange Ltd. are authorized to receive applications for the Bonds either directly or through agents and render all services to the customers. The subscription for the Sovereign Gold Bonds (SGB) may be made in the prescribed application form Form A or in any other form as near as thereto, stating clearly the grams (in units) of gold. Every application must contain the full name and address of the applicant, accompanied by the ‘PAN details’, mode of holding (D’mat or Physical), and Investor ID no. The Investor ID is a unique id generated from RBI’s E-Kuber which is created while applying for SGB or Inflation Indexed National Savings Securities- Cumulative, 2013 (IINSC-C). In case the applicant already has an investor ID issued by RBI’s E-Kuber portal for the above investment in any of the earlier tranches, the same should invariably be quoted by the investor while making any subsequent applications. The incomplete applications are liable to be rejected while uploading to E-Kuber portal.

The investors who apply for allotment of SGB online will get an online investment discount of Rs 50 per gram. In case the subscriber wishes to apply online, the ROs may make arrangements to enable the investors to apply online, in the interest of better customer service. While providing online services, it is the responsibility of ROs to ensure that all relevant fields for capturing details of the applicant, mode of holding, and other details as per the terms and conditions specified in the Notification are duly provided for.

On the date of allotment, the “Certificates of Holding” are generated for all the successful subscriptions by RBI. These are sent to the customers who have provided their e-mail Ids. The ROs can also download the certificates from RBI’s E-Kuber portal and provide the same to their customers on request. The Certificate of Holding may be printed in colour on A4 size 100 GSM paper in the prescribed Form C.

Transferability of SGB:

The Sovereign Gold Bonds are in the form of Stock Certificate and are therefore transferable before maturity to eligible transferees either wholly or in part by execution of an instrument of transfer in Form ‘F’, in case of a bond held in the Bond Ledger Account in accordance with the provisions of the Government Securities Act, 2006 and the Government Securities Regulations, 2007.

Re-materialisation of the bonds:

The customer may approach the Depository Participant, with a request for re-materialization of the bonds with details of his holding. (Any investor who has already converted the Sovereign Gold Bonds, securities, and debenture certificates to electronic formats has the option of changing them to physical form once again). People opt for rematerialization to avoid paying for the maintenance charge of a Demat account that has only 1 or 2 shares. It is the process of converting all securities in the electronic form to physical certificates. While filling in a Remat Request Form (RRF) and approaching the Depository Participant (DP), the investor may also specify the RO and bank account details (name of bank, branch, account number, IFSC, and type of account) through which the bonds will be serviced pursuant to re-materialization. The re-materialization request may be prepared by the Depository Participant based on the application and may be forwarded to the Depository. The request may be submitted by depository through E-Kuber Portal. No trading will be permitted for the securities sent for re-materialization. Post conversion, the bonds will be held in BLA with RBI, and servicing of the rematerialized bonds shall be done by the RO specified by the investor.

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