The Sovereign Gold Bond Scheme 2019-20

Oct 03, 2019 | by Avantis RegTech Legal Research Team

The Ministry of Finance on September 30, 2019, notifies the Sovereign Gold Bond Scheme 2019-20 under which there will be distinct series for every tranche which will be indicated on the Bond issued to the investor. The Government of India may close the Scheme before the specified period with prior notice. The Gold Bonds under this Scheme may be held by a Trust, HUFs, Charitable Institution, University or 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 above-mentioned Scheme 2019-20 specifies the followings:

1. Denomination, Subscription limit and Pricing

2. Procedure for making application for subscription to Gold Bonds

3. The Gold Bonds shall be issued in the form of a Stock Certificate. The investors will be issued a Holding Certificate (Form C) and the Bonds shall be eligible for conversion into de-mat form.

4. Period of subscription

5. The interest on the Gold Bonds shall commence from the date of issue and shall be paid at a fixed rate of 2.50 percent per annum on the nominal value of the bond. The interest shall be payable in half-yearly rests and the last interest shall be payable along with the principal on maturity.

6. The receiving offices shall be authorised to receive applications for the bonds either directly or through agents.

7. All payments for Gold Bonds shall be accepted in Indian Rupees through cash (upto a maximum of Rs. 20,000/-) or demand draft, or cheque, or electronic banking. And where the payment is made through cheque or demand draft, the same shall be drawn in favour of the receiving office.

8. The Gold Bonds shall be repayable on the expiration of eight years from the date of the issue of the Bonds.

9. Bonds acquired by the banks through the process of invoking lien or hypothecation or pledge alone, shall be counted towards Statutory Liquidity Ratio.

10. The Gold Bonds may be used as collateral security for availing any loan.

11. The interest on the Gold Bond shall be taxable as per the provisions of the Income-tax Act, 1961.

12. Nomination

13. Transfer and trading of Gold Bonds

[Notification No. G.S.R. 705(E)]


Related Updates

Alternate Text

Get updates on the go on RuleZbook Mobile App.