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
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.