Sovereign Gold Bond 2018-19 : Series-I.

By | April 14, 2018
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(Last Updated On: April 14, 2018)
Ministry of Finance

​The ​Government of India, in consultation with the Reserve Bank of India, decide​s​ to issue Sovereign Gold Bond, 2018-19-Series-I​;​ Applications for the ​B​ond​(s)​ will be accepted from 16th to 20th April, 2018​;​ The Certificate of Bond (s)​ to be issued on May 04, 2018​; ​The Bonds ​to be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges viz., National Stock Exchange of India Ltd and Bombay Stock Exchange, Ltd.

Posted On: 13 APR 2018 7:46PM by PIB Delhi

The ​Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bond, 2018-19-Series-I. Applications for the bond will be accepted from 16th to 20th April, 2018. The Certificate of Bond (s) will be issued on May 04, 2018. The Bonds will be sold through ​B​anks, Stock Holding Corporation of India Limited (SHCIL), designated ​P​ost ​O​ffices and recognised ​S​tock ​Exchanges viz., National Stock Exchange of India Ltd and Bombay Stock Exchange, Ltd.

The features of the Bond ​(s)​  are given below:

 

Sl. No.ItemDetails
1Product nameSovereign Gold Bond 2018-19 -Series-I
2IssuanceTo be issued by Reserve Bank India on behalf of the Government of India.
3EligibilityThe Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable Institutions.
4DenominationThe Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
5TenorThe tenor of the Bond will be for a period of 8 years with exit option in 5th, 6th and 7th year, to be exercised on the interest payment dates.
6Minimum sizeMinimum permissible investment will be 1 gram of gold.
7Maximum limitThe maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.  A self-declaration to this effect will be obtained.  The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchase from the Secondary Market.
8Joint holderIn case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.
9Issue pricePrice of Bond will be fixed in Indian Rupees 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 for those who subscribe online and pay through digital mode.
10Payment optionPayment for the Bonds will be through cash payment (upto a maximum of Rs 20,000) or demand draft or cheque or electronic banking.
11Issuance formThe Gold Bonds will be issued as Government of India Stocks under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.
12Redemption priceThe redemption price will be in Indian Rupees based on simple average of closing price of gold of 999 purity of previous 3 working days published by IBJA.
13Sales channelBonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices as may be notified and recognised stock exchanges viz., National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd, either directly or through agents.
14Interest rateThe investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.
15CollateralBonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.  The lien on the bond shall be marked in the depository by the authorised banks.

Note: The loan against SGBs would be subject to decision of the bank/financing agency, and cannot be inferred as a matter of right.

16KYC DocumentationKnow-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.
17Tax treatmentThe interest on Gold Bonds shall be taxable as per the provision of 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
18TradabilityBonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
19SLR eligibilityBonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.
20CommissionCommission for distribution of the bond shall be paid at the rate of 1% of the total subscription received  by  the receiving offices 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.

 

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