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Sovereign Gold Bond Scheme 2015

Dated:- 2-11-2015 - 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 r .....

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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, .....

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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 appli .....

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ven 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 O .....

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n 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 fixe .....

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e 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 wil .....

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r 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 leas .....

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efore 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 .....

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