Relief/Savings Bonds: Transfer Rules for Non-Cumulative Bonds
Current · Source: Reserve Bank of India · RBI/2004-05/494 · issued 17 Jun 2005 · ~2 min read
Quick answerRBI allows banks to process transfers of non-cumulative Relief/Savings Bonds during June/December even after interest warrants are sent, but transfers must be marked 'ex-interest' for that half-year.
The rule, in the simplest words
Banks can now accept requests to transfer non-cumulative bonds (bonds that pay interest every six months) during June and December, even after interest checks have been sent out.
The transfer must be marked 'ex-interest' (meaning the interest for that half-year stays with the original owner, not the new owner).
When someone asks to transfer a bond during June or December, the bank must tell them that the interest for that half-year has already been sent to the old owner.
The bank must put a special note on the receipt saying the transfer is 'ex-interest' for the current half-year.
How it plays out — a real example
An agency-banking (government business) officer in Indore receives a transfer request for a non-cumulative Relief Bond in December, after interest warrants have been mailed. She processes the transfer, marks it 'ex-interest', and tells the person handing in the deed that the interest for that half-year has already gone to the original bondholder. She also stamps the receipt with the required legend to avoid any confusion.
What changed
RBI clarified that there is no 'shut period' for bond transactions. Banks can now accept and process transfer requests for non-cumulative bonds during June/December after interest warrants have been dispatched. The transfer must be done ex-interest, and the counter receipt must carry a specific legend.
What it means for you
Banks can avoid delays in processing bond transfers during interest payment months. This reduces investor complaints and operational bottlenecks. However, banks must ensure clear communication to transferors and transferees about the ex-interest status to prevent disputes.
What you must do
Update internal procedures to accept and process non-cumulative bond transfers during June/December without a shut period.
Train designated branch staff to affix the prescribed legend on counter receipts for transfers during these months.
Inform transfer deed tenderers that interest for the current half-year has already been sent to the transferor and the transfer is ex-interest.
Issue clear instructions to all designated branches servicing Relief/Savings Bonds to follow these rules scrupulously.
Who it affects
State Bank of India and its associates, Nationalised banks, ICICI Bank, HDFC Bank, UTI Bank, IDBI Bank, Stock Holding Corporation of India Ltd (SHCIL), All designated branches issuing and servicing Relief/Savings Bonds
❓ Common questions
Can we process bond transfers during June and December after interest warrants are sent?
Yes, RBI has clarified there is no shut period. You can accept and process transfers of non-cumulative bonds during these months, but the transfer must be ex-interest for the current half-year.
What legend must we put on the counter receipt for such transfers?
The receipt must state: 'The non-cumulative bonds covered by this receipt will be transferred in favour of the transferee (s) indicated in the transfer deed ex-interest for the current half-year'.
Do we need to inform the person submitting the transfer deed about anything?
Yes, you must inform the tenderer that the half-yearly interest for the current half-year has already been dispatched to the transferor, so the transfer will be ex-interest.
📜 Read the original circular — full text as issued by RBI
RBI/2004-05/494
CO.DT.13.01.298/H.10753-10782/2004-05
June 17, 2005
Jyeshtha 27, 1927 (S)
The Chairman and Managing Director,
State Bank of India and its Associates Nationalised Banks
ICICI Bank Ltd., HDFC Bank Ltd., UTI Bank
Ltd.
IDBI Bank Ltd., & SHCIL
Dear Sir,
Issue and servicing of Relief /
Savings Bonds - - Payment of half-yearly interest
Please refer to our circular RBI/2004/152
CO.DT.13.01.298/H.5894/2003-04 dated April 16, 2004 advising you, inter
alia, to despatch Interest warrants in respect of half-yearly interest
due on the captioned bonds, to the investors one month in advance to avoid any
complaints from them. As we have not prescribed any 'Shut Period' for
the transactions relating to the captioned bonds, the request received for transfers
of Bonds held under the Bond Ledger Account in respect of non-cumulative bonds
after despatch of half- yearly interest warrants i.e., during the months of
June / December may be accepted and processed in due course. However, the tenderer
of the transfer deed may be apprised that the half-yearly interest for the ensuing
half-year ending has already been despatched to the transferor and the transfer
can be effected ex-interest for the
relevant half-year. The following legend may be affixed on the counter
receipt issued to the tenderer of transfer deed during the above period
'The non-cumulative bonds
covered by this receipt will be transferred in favour of the transferee
(s) indicated in the transfer deed ex-interest for the current half-year'.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2004-05/494 · issued 17 Jun 2005. The plain-English explanation above is BankPulse’s own independent summary.
Train designated branch staff to affix the prescribed legend on counter receipts for transfers during these months.
Issue clear instructions to all designated branches servicing Relief/Savings Bonds to follow these rules scrupulously.
📜 Compliance
Update internal procedures to accept and process non-cumulative bond transfers during June/December without a shut period.
Inform transfer deed tenderers that interest for the current half-year has already been sent to the transferor and the transfer is ex-interest.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (State Bank of India and its associates, Nationalised banks, ICICI Bank, HDFC Bank, UTI Bank, IDBI Bank, Stock Holding Corporation of India Ltd (SHCIL), All designated branches issuing and servicing Relief/Savings Bonds), your first concrete step on “Relief/Savings Bonds: Transfer Rules for Non-Cumulative Bonds” is: “Update internal procedures to accept and process non-cumulative bond transfers during June/December without a shut period.” (RBI issued this 17 Jun 2005).
Circular: RBI/2004-05/494 -- Relief/Savings Bonds: Transfer Rules for Non-Cumulative Bonds
Issued: 17 Jun 2005
Action required: Update internal procedures to accept and process non-cumulative bond transfers during June/December without a shut period.
Action required: Train designated branch staff to affix the prescribed legend on counter receipts for transfers during these months.
Action required: Inform transfer deed tenderers that interest for the current half-year has already been sent to the transferor and the transfer is ex-interest.
Action required: Issue clear instructions to all designated branches servicing Relief/Savings Bonds to follow these rules scrupulously.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2292&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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