What changed
RBI issued a master circular (DGBA.CDD No. H-8574/13.01.299/2012-13) consolidating all prior instructions on nomination for Relief/Savings Bonds up to June 30, 2012. This replaces the earlier master circular of July 1, 2011. The key provisions remain unchanged: nomination is allowed for sole or joint holders (except promissory notes or bearer bonds), can be made before maturity, and can be varied or cancelled by a fresh nomination in writing.
What it means for you
For banks and authorized agencies, this circular simplifies compliance by providing a single reference document for nomination procedures. It ensures uniformity across all agency banks for handling nominations, including for NRIs in the 8% Savings (Taxable) Bonds scheme. Banks must update their internal manuals and train staff on the consolidated rules to avoid errors in processing nominations and payments.
What you must do
- Update internal operating manuals with the consolidated nomination rules from this master circular.
- Ensure all agency bank branches issue an 'Acknowledgement of Nomination' to investors as required.
- Train staff on the specific provisions for NRI nominations in 8% Savings (Taxable) Bonds and the automatic cancellation of nomination upon transfer or substitution.
- Verify that no nomination is accepted for Bond Ledger Accounts held by an adult on behalf of a minor or in a fiduciary capacity.
Who it affects
State Bank of India and Associates, All nationalized banks (excluding Punjab and Sind Bank & Andhra Bank), Axis Bank, ICICI Bank, HDFC Bank, Stock Holding Corporation of India Ltd. (SCHIL), Investors in Relief/Savings Bonds
Can I nominate an NRI for my 8% Savings (Taxable) Bonds?
Yes, the circular allows sole or joint holders of 8% Savings (Taxable) Bonds, 2003 to nominate an NRI. However, remittance of interest or maturity proceeds will follow the regulations applicable to NRIs.
What happens if I transfer my bond to someone else?
Any existing nomination automatically stands cancelled when the holder transfers the certificate to another party. You would need to make a fresh nomination after the transfer.
Can I nominate a minor as a nominee?
Yes, you can nominate a minor. In that case, you must appoint a person (who is not a minor) to receive the bond proceeds on behalf of the minor nominee in the event of your death during the minor's minority.