What changed
RBI issued a master circular consolidating all previous instructions on nomination facility for Relief/Savings Bonds, updated as of June 30, 2008. The circular brings together rules on nomination, variation, cancellation, and exceptions in one document for easier reference by Public Debt Offices and agency banks.
What it means for you
Banks and lenders acting as agency banks now have a single reference for nomination procedures, reducing ambiguity. The circular clarifies that sole holders can nominate NRIs for specific bonds, and nominations can be made separately for each deposit in a Bond Ledger Account. This streamlines compliance and customer service for bond-related nominations.
What you must do
- Update internal procedures to align with the consolidated nomination rules for Relief/Savings Bonds.
- Train staff on the updated nomination facility, including NRI eligibility and separate nomination per deposit.
- Ensure acknowledgment of nomination is issued to bond holders as per the circular.
- Review and update customer communication materials to reflect the consolidated guidelines.
Who it affects
State Bank of India and associate banks, Nationalized banks, ICICI Bank, IDBI Bank, HDFC Bank, Axis Bank, Stock Holding Corporation of India Ltd, Public Debt Offices, Agency banks handling Relief/Savings Bonds
Can a sole holder nominate an NRI for Relief/Savings Bonds?
Yes, for 6.5% Savings Bonds 2003 (Non-Taxable) and 8% Savings (Taxable) Bonds 2003, a sole holder can nominate an NRI for interest/redemption value, subject to normal foreign remittance regulations.
What happens if a nominee dies when multiple nominees are named?
If two or more persons are nominated, the title to the bonds vests in the surviving nominee(s) upon the death of a nominee.
Is nomination allowed for joint holders of a bond?
No, nomination is not permissible when the certificate is held jointly by two persons and both are alive.