RBI issues operational guidelines for gold bonds

MUMBAI: Commercial banks and post offices will now have additional responsibilities to maintain subscription records for sovereign gold bonds as the Reserve Bank of India has mandated some operational procedures for them.

“Receiving offices will be required to preserve applications till the bonds are matured and are repaid,” RBI said in a notification.

Banks can engage non-banking finance companies, NSC (National Savings Certificate) agents and others to collect application forms on their behalf. Banks may enter into arrangements or tie-ups with such entities, the central bank said.

The government will issue gold bonds from November 26 this year, offering an annual interest rate of 2.75% to domestic investors, whose gold fetish shows no sign of fading. Those bonds are seen as an alternative for buying the yellow metal physically, which in turn, should bring down the country’s gold import improving the fiscal condition.

“Receiving offices, ie., branches of the scheduled commercial banks and designated post offices will “own” the customer and provide necessary services with regards to this bond e.g. update contact details, receive requests for premature encashment.”

For the investors, who have specified their demat account details, the securities will be credited in those on the allotment date.

An applicant can also avail physical forms at all those branches while multiple joint holders and nominees (of first holder) are permitted.