What changed
RBI issued a revised Master Circular (DGBA.CDD No. H 9022 / 13.01.299 / 2011-12) consolidating all prior instructions on nomination facility for Relief/Savings Bonds, updated up to June 30, 2011. The circular replaces earlier individual circulars and provides a single reference for agency banks.
What it means for you
Agency banks now have a unified document to handle nominations for Relief/Savings Bonds, reducing confusion from multiple circulars. Banks must ensure compliance with nomination rules, including the ability for NRIs to be nominees for 8% Savings (Taxable) Bonds, 2003, and proper acknowledgment issuance.
What you must do
- Update internal procedures to align with the consolidated master circular for nomination facility.
- Train staff on nomination rules, including NRI nominations for 8% Savings (Taxable) Bonds, 2003.
- Issue 'Acknowledgement of Nomination' to investors as required.
- Ensure cancellation of nomination is processed when holders substitute, cancel, or transfer bonds.
Who it affects
State Bank of India and associate banks, 17 nationalized banks, Axis Bank Ltd, ICICI Bank Ltd, IDBI Bank, HDFC Bank Ltd, Stock Holding Corporation of India Ltd, All agency banks handling Relief/Savings Bonds
Can an NRI be nominated for Relief/Savings Bonds?
Yes, for 8% Savings (Taxable) Bonds, 2003, the sole or joint holders can nominate an NRI. Remittance of interest or maturity value will follow NRI regulations.
What happens if a nominee is a minor?
The bond holder(s) can appoint a person (not a minor) to receive the bond proceeds on behalf of the minor nominee in case of the holder's death during the nominee's minority.
When does a nomination automatically cancel?
A nomination cancels automatically if the holder applies for substitution or cancellation and it is registered, or if the holder transfers the certificate to another party.