Bank Of Baroda Gold Deposit Scheme

Features of the Bank of Baroda Sovereign Gold Bonds

Some of the features of the Sovereign Gold Bonds offered by Bank of Baroda are detailed here.

• The bank provides security against the bonds issued in the form of a Holding Certificate (Form C). The bond so issued will be eligible for conversion to Demat form.
• The bonds are issued in the denomination of 1 gram of gold and its multiples. The minimum investment that an eligible investor can make under the scheme is one gram and the maximum investment under the scheme for each fiscal year is

• 4 kg for individuals
• 4 kg for HUF
• 20 kg for Trusts and similar entities that are notified by the government from time to time.

The other conditions pertaining to the above limits are,

• In case of joint holding by the applicants, the given limits will apply only to the first applicant.
• While calculating the annual limit, the bonds in all the tranches will be considered whether subscribed in the initial issuance of the government or purchased in secondary market.
• However, this limit will not include those holdings that are held as collaterals by the banks or financial institutions.

• The issue price for SGB Series 2019-20 Series is Rs. 4016 per gram.
• The tenure of these bonds is 8 years but can be redeemed before maturity after five years of completion from the date of issue of the bonds. The payment in such case will be made when the next interest payment is due.
• The redemption price shall be fixed and payable in INR. The basis of such redemption price shall be the simple average of closing price of gold of 999 purity of the previous 3 working days, published by the India Bullion and Jewelers Association Limited.
• These bonds are transferable as well as tradable as per the guidelines issued in this regard.
• The scheme also permits the cancellation of the investment application till the closure of the issue but part cancellation of submitted request of purchase of gold bonds is not allowed.

Benefits of the Bank of Baroda Sovereign Gold Bond

The bank’s sovereign gold scheme has a lot of benefits for the investors, some of them are enlisted below.

• The investors get a discount of Rs. 50 per gram if the investors apply for the scheme online. The issue price for such investors is Rs. 3966 per gram.
• These Bonds can also be used as collateral for loans. The Loan to Value ratio will be in line with that as applicable to ordinary gold loans mandated by the RBI from time to time. The bank shall also mark the lien on the Bonds appropriately in E-kuber portal by the Bank/Depository.
• The capital gains tax arising on redemption of SGB to an individual has been exempted from the purview of taxation. The indexation benefits will be provided to long term capital gains arising to any person upon transfer of these bonds.
• The bank permits multiple joint holders and nominees with respect to this scheme. The limit of maximum holding in a fiscal year will however apply for the first applicant.
• An individual NRI can also get the security transferred in his/her name if they are a nominee of any deceased investor subject to following conditions,

• Such investor shall hold the security till the maturity of the bond or till early redemption
• Interest payment and the principal received from the investment cannot be repatriated outside India

• All branches in India are authorized to issue these bonds
• Branches will ‘own’ the customer and also provide necessary services with regards to this bond e.g. update contact details, receive requests for premature encashment, etc.
• Branches will be required to preserve applications till the bonds are matured and are repaid.

Interest payment of the Bank of Baroda Sovereign Gold Bond

The interest on the Sovereign Gold bonds issued by the bank is subject to a rate of interest of 2.50% annually on nominal value

The interest payment is made half yearly in case of these bonds.

The bank has a policy to pay the last interest along with the payment of the principal amount at the time of maturity of these bonds.

The interest accrued on the bonds is not tax free and shall be taxable under section 43 of the Income Tax Act, 1961.

Eligibility for this Scheme

The eligible applicants for this scheme are the following persons resident in India

• Individual (either for himself or in the name of a minor or held jointly with another individual)
• Hindu Undivided Family
• Trust
• Charitable Institution

For this purpose, the scheme defines the term ‘person resident in India’ in line with clause (v) of section 2 of the Foreign Exchange Management Act, 1999.

Documents Required for the Scheme

The bank has mentioned a list of documents that are required for the purpose of this scheme. The details of the same are,

• Duly filled application form that can be submitted at the branches during normal working hours on the week of subscription.
• The bonds can be subscribed by applying in prescribed ‘FORM A’ or any other similar form.
• The form has to clearly mention the details like the quantity of the gold in grams, name and address of the applicant.
• The application has to be completed in order to be accepted as partial/incomplete applications are rejected.
• The application must mandatorily mention the PAN Number of the investor issued by the Income Tax Department.
• The applicants will receive an acknowledgement receipt in the prescribed FORM B.
• The investors will be provided with a Certificate of Holding via email id if provided by them and the same has to be printed in colour on A4 size 100 GSM paper.

FAQs