FAQ : ALL ABOUT SOVEREIGN GOLD BOND

1. 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.

2. Why should I buy SGB rather than physical gold? What are the benefits?

The quantity of gold for which the investor pays is protected, since he receives the ongoing market price at the time of redemption/ premature redemption. The SGB offers a superior alternative to holding gold in physical form. The risks and costs of storage are eliminated. Investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip etc.

3. Are there any risks in investing in SGBs?

There may be a risk of capital loss if the market price of gold declines. However, the investor does not lose in terms of the units of gold which he has paid for.

4. Who is eligible to invest in the SGBs?

Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, charitable institutions, etc.

5. Whether joint holding will be allowed?

Yes, joint holding is allowed.

6. Can a Minor invest in SGB?

Yes. The application on behalf of the minor has to be made by his / her guardian.

7. Where can investors get the application form?

The application form will be provided by the issuing banks/designated Post Offices/agents. It can also be downloaded from the RBI’s website. Banks may also provide online application facility.

8. What are the Know-Your-Customer (KYC) norms?

Know-Your-Customer (KYC) norms will be the same as that for purchase of physical form of gold. Identification documents such as Aadhaar card/PAN or TAN /Passport / Voter ID card will be required. KYC will be done by the issuing banks/Post Offices/agents.

9. What is the minimum and maximum limit for investment?

The Bonds are issued in denominations of one gram of gold and in multiples thereof. Minimum investment in the Bond shall be two grams with a maximum buying limit of 500 grams per person per fiscal year (April – March). In case of joint holding, the limit applies to the first applicant.

10. Can I buy 500 grams in the name of each of my family members?

Yes, each family member can hold the bond if they satisfy the eligibility criteria as defined at Q No.4.

11. Can I buy 500 grams worth of SGB every v year?

Yes. One can buy 500 grams worth of gold every year as the ceiling has been fixed on a fiscal year (April-March) basis.

12. Is the limit of 500 grams of gold applicable if I buy on the Exchanges?

The limit of 500 grams per financial year is applicable even if the bond is bought on the exchanges.

13 What is the rate of interest and how will the interest be paid?

The Bonds bear interest at the rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment. Interest will be credited semiannually to the bank account of the investor and the last interest will be payable on maturity along with the principal.

14. Who are the authorized agencies selling the SGBs?

Bonds are sold through scheduled commercial banks and designated Post Offices either directly or through their agents like NBFCs, NSC agents, etc.

15 Is it necessary for me to apply through my bank?

It is not necessary for the customer to apply through the bank where he/she has his/ her account. A customer can apply through another bank or Post Office.

16. If I apply, am I assured of allotment?

If the customer meets the eligibility criteria, produces a valid identification document and remits the application money on time, he/she will receive the allotment.

17. When will the customers be issued Holding Certificate?

The customers will be issued Certificate of Holding on the date of issuance of the SGB. Certificate of Holding can be collected from the issuing banks/Post Offices/agents or obtained directly from RBI on email, if email address is provided in the application form.

18. Can I apply online?

Yes. A customer can apply online through the website of the listed scheduled commercial banks.

19. At what price the bonds are sold?

Price of bond will be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average price for gold of 999 purity published by the India Bullion and Jewellers Association Ltd. (IBJA). The issue price will be disseminated by the Reserve Bank of India

20. Will RBI publish the rate of gold applicable every day?

The price of gold for the relevant tranche will be published on RBI website two days before the issue opens.

21. What will I get on redemption?

On maturity, the redemption proceeds will be equivalent to the prevailing market value of grams of gold originally invested in Indian Rupees. The redemption price will be based on simple average of previous week’s (Monday-Friday) price of closing gold price for 999 purity published by the IBJA.

22. How will I get the redemption amount?

Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond.

23. What are the procedures involved during redemption?

The investor will be advised one month before maturity regarding the ensuing maturity of the bond.

On the date of maturity, the maturity proceeds will be credited to the bank account as per the details on record.

In case there are changes in any details, such as, account number, email ids, then the investor must intimate the bank/PO promptly.

24. Can I encash the bond anytime I want? Is premature redemption allowed?

Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after 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.

25. What do I have to do if I want to exit my investment?

In case of premature redemption, investors can approach the concerned bank/Post Office/agent thirty days before the coupon payment date. Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date. The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond.

26. Can I gift the bonds to a relative or friend on some occasion?

The bond can be gifted/transferable to a relative/friend/anybody who fulfills the eligibility criteria (as mentioned at Q. no. 4). The Bonds shall be transferable in accordance with the provisions of the Government Securities Act 2006 and the Government Securities Regulations 2007 before maturity by execution of an instrument of transfer which is available with the issuing agents.

27. Can I use these securities as collateral for loans?

Yes, these securities are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC). The Loan to Value ratio will be same as applicable to ordinary gold loan mandated by the RBI from time to time.

28. What are the tax implications on i) interest and ii) capital gain?

Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961(43 of 1961). Capital gains tax treatment will be the same as that for physical gold.

29. Is tax deducted at source (TDS) applicable on the bond?

TDS is not applicable on the bond. However, it is the responsibility of the bond holder to comply with the tax laws.

30. Who will provide other customer services to the investors after issuance of the bonds?

The issuing banks/Post Offices/agents through which these securities have been purchased will provide other customer services such as change of address, early redemption, nomination, etc.

31. What are the payment options for investing in the Sovereign Gold Bonds?

Payment can be made through cash/cheques/demand draft/electronic fund transfer.

32. Whether nomination facility is available for these investments?

Yes, nomination facility is available as per the provisions of the Government Securities Act 2006 and Government Securities Regulations, 2007. A nomination form is available along with Application form.

33. Is the maximum limit of 500 gms applicable in case of joint holding?

The maximum limit will be applicable for the first applicant in case of a joint holding for the specific application.

34. Are institutions like banks allowed to invest in Sovereign Gold Bonds?

There is no bar on investment by banks in Sovereign Gold Bonds. These will qualify for SLR.

35. Can I get the bonds in demat form?

The bonds can be held in demat account.

36. Can I trade these bonds?

The bonds are tradable on stock exchanges from the date to be notified by RBI. The bonds can also be sold and transferred as per provisions of Government Securities Act.

37. Can I get part repayment of these bonds at the time of exercising put option?

Yes, part holdings can be redeemed in multiples of one gm.

Source : PO Tools

Govt to revise small savings rate by end of this month

The Centre is likely to reduce the interest rates on small savings schemes by the end of this month with a view to aligning them with the market rates.

"The government will take a decision on reducing small savings rate by the end of this month," a Finance Ministry official said.

The ministry in September had announced its intention to review interest rates on small savings, which includes Post office savings and Public Provident Fund ( PPF), after bankers said high rates on such schemes run by the government make fixed deposits of banks uncompetitive.

The government may leave the interest rates on Senior Citizen's Savings Scheme and Sukanya Samriddhi Accounts unchanged.

With small saving deposits commanding a rate of 8.7-9.3 per cent, banks have been reluctant to transmit the entire policy rate reduction by the RBI to borrowers.

The median base lending rates of banks have come down by about 60-70 bps despite extremely easy liquidity conditions, which is a fraction of the 125 basis points of the policy rate reduction since January.

Smalls saving schemes include Post Office Monthly Income Scheme (MIS), Public Provident Fund (PPF), Post Office fixed Deposit Scheme, Senior Citizen's Savings Scheme, Post Office Savings Account and Sukanya Samriddhi Accounts.

Source : The Economic Times

Government to issue Sovereign Gold Bonds with effect from 26th November, 2015;

Bonds to be sold through banks and designated post offices

Government of India, in consultation with Reserve Bank of India (RBI), has decided to issue Sovereign Gold Bonds. The Bonds will be issued on November 26, 2015. Applications for the bond will be accepted from November 05, 2015 to November 20, 2015. The Bonds will be sold through banks and designated post offices as may be notified. The borrowing through issuance of the Bond will form part of market borrowing programme of Government of India.

It may be recalled that the Finance Minister had announced in Union Budget 2015-16 about developing a financial asset, Sovereign Gold Bond, as an alternative to purchasing metal gold.

The major features of the Bond are given below:

1. Product name......Sovereign Gold Bond

2.Issuance........To be issued by Reserve Bank India on behalf of the Government of India.

3. Eligibility ........The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions.

4.Denomination.....The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.

5.Tenor.........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.

6.Minimum size......Minimum permissible investment will be 2 units (i.e. 2 grams of gold).

7.Maximum limit........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.

8.Joint holder......In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only.

9.Frequency........The Bonds will be issued in tranches. Each tranche will be kept open for a period to be notified. The issuance date will also be specified in the notification.

10.Issue price.........Price of Bond will be fixed in Indian Rupees on the basis of the previous week’s (Monday–Friday) simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd. (IBJA).

11.Payment option.........Payment for the Bonds will be through electronic funds transfer/cash payment/ cheque/ demand draft.

12.Issuance form.....Government of India Stock under GS Act, 2006. The investors will be issued a Stock/Holding Certificate. The Bonds are eligible for conversion into demat form.

13.Redemption price.....The redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.

14/Sales channel........Bonds will be sold through banks and designated Post Offices, as may be notified, either directly or through agents.

15.Interest rate......The investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.

16.Collateral.........Bonds 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.

17.KYC Documentation.......Know-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.

18.Tax treatment.........The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold.

19.Tradability........Bonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI.

20.SLR eligibility...........The Bonds will be eligible for Statutory Liquidity Ratio.

21.Commission........Commission for distribution shall be paid at the rate of 1% of the subscription amount.

Sad news : Our Former President APJ Abdul Kalam lost his breath today

Today our former President Dr. APJ Abdul Kalam visited to Shillong, Meghalaya, North East to deliver speech at IIM, Shillong about Livable Planet Earth. While delivering speech in stage, suddenly fell down and lost his breath. Immediately rushed to Bethani Hospital, Shillong but .....

During an Interview, Dr Kalam said that "he would like to die while teaching his Students"

And the same happens today.

"Don't declare Holiday on my death instead work an extra day, if you love me" - Dr. Kalam.

last living picture of Dr.Kalam.  While delivering speech at IIM, Shillong fell down.....

இந்திய மக்களே, மாணாக்களே, எனது, தங்களது விருப்பத்தின்படி நமது இந்தியாவை எல்லா வகையிலும் முன்னேற்றி, முன்னெடுத்தி செல்ல அனைவரும் உறுதி பூணுங்கள். நமது அனைவரின் கனவான VISION 2020 நிறைவேற்றுவோம்.

Not possible to provide minimum monthly pension of Rs 3,000: Government

It is not possible to provide minimum monthly pension of Rs 3,000 under the Employees' Pension Scheme 1995 (EPS-95), run by retirement fund body EPFO, Parliament was informed today.

"The EPS, 1995 being a contributory scheme, obligations of all payments are met from the assets of the fund. The higher level of minimum pension of at Rs 3,000 is not possible without compromising the financial viability of the scheme," Labour Minister Bandaru Dattatreya said in a written reply to Rajya Sabha.

In a separate reply, the Minister said "providing a minimum pension of Rs 3,000 to lakhs of existing pensioners and crores of prospective pensioners has very huge financial implications and could jeopardize the existence of the pension fund itself."

The Minister added: "If the government's share is increased from 1.16 per cent to 8.33 per cent, as recommended by the Committee, it would involve a substantial increase in the financial burden. It was estimated to involve Rs 16,417 crore for the year 2013-2014 to implement this recommendation."

According to the reply, the 147th Report of the Committee on Petitions, Rajya Sabha had recommended increasing the government's share of contribution to EPS-95 from 1.16 per cent of the basic wages to 8.33 per cent to support the minimum pension level of Rs 3,000 per month.

The Minister informed the House that EPFO is providing Rs 1,000 minimum monthly pension under the scheme since September 1, 2014. It is benefiting around 20 lakh pensioners.

There are around 47 lakh pensioners under the scheme run by the Employees' Provident Fund Organisation (EPFO).

Source:-The Economic Times

BSNL is planning to launch over night free talk time to Landline users

http://business.dinamalar.com/news_details.asp?News_id=32575&cat=1

Tamil language in CBSE Schools

Court stays PA recruitment process

AURANGABAD: The Aurangabad bench of the Bombay high court (HC) has stayed the recruitment process being conducted by the postal department. 

During the entrance examination conducted at 26 centres across the state on March 29, some visually impaired students in Osmanabad were denied entry on the grounds that they were accompanied by writers/scribe having qualification above std X. Thereafter, five visually impaired students had approached the court. 

In January this year, the postal department had invited online applications from eligible candidates for direct recruitment for the posts of postman/mail guard in postal/RMS divisions. 

The department's notification clearly provided specific reservation for visually impaired candidates. Accordingly, the eligible visually impaired candidates applied by January 24 and were provided online admit cards soon. 

Lawyer Swapnil Tawshikar, who filed a writ petition in the HC on behalf of the aggrieved party, told TOI, "In the list of instructions mentioned on the admit cards, visually impaired candidates were allowed to take assistance of scribe/writers for the said examination. However, 25 such candidates, who reached the exam centre in Osmanabad, were not allowed to appear for the examination on the ground that the writers brought by them had education qualification above matriculation." 

Vishal Lohare (24), a native of from Latur district, along with four students decided to represent the 25 candidates who were not allowed to appear for the examination. All the five candidates approached the Aurangabad bench of the Bombay HC and filed a writ petition through lawyers Tawshikar and Anant Devakate. 

Tawshikar said the HC bench comprising justices SS Shinde and PR Bora heard the matter on April 10. The lawyers told the court the guidelines issued by the central government make it clear that visually impaired people can take assistance of writers while appearing for any written examination. The guidelines further mention that there shall be no restrictions on education qualifications, marks and age of the writer.

http://timesofindia.indiatimes.com/city/aurangabad/Court-stays-recruitment-process/articleshow/46926465.cms