Master Directions on Relief/Savings Bonds
UR
- Applies toSBI, other listed banks and SHCIL, as Receiving Offices RBI appointed for these bonds, and their brokers
- StatusIn force
- IssuedJul 03, 2018
- Amendmentsnone tracked
- Length31 points in 1 section · 3 min read
The four dates on this rule
- PublishedJul 03, 2018The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
This rulebook is short, and the page is short with it. A one-page covering letter plus three short lettered sections: brokers, brokerage payment, nomination. Stripped of RBI's own page chrome, that is all it says. 31 points is not a number reached by padding.
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Numbers to remember
| ₹0.50 | A broker earns ₹0.50 for every ₹100 of bonds bought as a Bond Ledger Account. RBI Section B Item 1 |
| 30 days | The Receiving Office must settle a broker's claim within 30 days of subscription. RBI Section B Item 3 |
| 90 per cent | RBI pays 90 per cent of the month's brokerage by the 3rd working day of the next month. RBI Section B Item 3 |
| 10 per cent | RBI pays the remaining 10 per cent once the Receiving Office files an Appendix IV statement. RBI Section B Item 3 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Can be read two ways
A point marked this way sits on an RBI paragraph that can honestly be read two ways. Our own sentence takes one of the two. BankPulse does not choose for you: read RBI’s own paragraph, at the number printed on the point, before you act on it.
Two ways — both, or either one. RBI’s paragraph joins two things in the and-or form. One reading: Both of them apply, together. The other: Either one of them, on its own, is enough.
Must know
1. Receiving Office gives a code
The Receiving Office gives the broker a code number for every brokerage claim.
2. Receiving Office owns its brokers
The Receiving Office that appoints a broker or sub-agent answers for that broker's conduct.
3. No RBI name in publicity
A broker or sub-agent may not use RBI's name in its own publicity.
4. Brokerage rate on bonds
A broker earns ₹0.50 for every ₹100 of bonds bought as a Bond Ledger Account.
BankPulse example. A client buys ₹1,00,000 of bonds through a registered broker. RBI's own ₹0.50-per-₹100 rate pays the broker ₹500 brokerage.
5. No brokerage on own bonds
A broker earns no brokerage on a bond it buys for itself.
6. Claims settled within 30 days
The Receiving Office must settle a broker's claim within 30 days of subscription.
7. 90 per cent next month
RBI pays 90 per cent of the month's brokerage by the 3rd working day of the next month.
8. Balance paid on a statement
RBI pays the remaining 10 per cent once the Receiving Office files an Appendix IV statement.
9. Who can be nominated
A bond holder may nominate one or more people to inherit the bond.
10. Nominee must qualify too
A nominee must himself be allowed to hold this kind of bond.
11. Nominate before maturity
A nomination must be made before the bond matures.
12. Surviving nominee inherits
If one of several nominees dies, the surviving nominee or nominees inherit the bond.
13. Nomination ends on transfer
A nomination ends if the holder transfers the bond to someone else.
14. New owner registers a nominee
The new bond owner must register a fresh nominee.
15. A minor nominee's guardian
If the nominee is a minor, the holder may name an adult to receive the money instead.
16. Receiving Office confirms it
The Receiving Office must give the holder an Acknowledgement of Nomination.
17. No NRI nominee today
The only scheme still open for subscription, the 7.75% Savings Bond, allows no NRI nominee.
18. No nomination for minor's bond
No nomination is allowed when an adult holds the bond only on a minor's behalf.
19. No nomination without ownership
No nomination is allowed if the holder only holds the bond for someone else, not as owner.
Do it
1. How a broker registers
A broker asks to register by writing to the Receiving Office on its own letterhead.
2. Delisting a dormant broker
A broker idle for about two years may be delisted after due notice.
3. No tax deducted on brokerage
The Receiving Office deducts no tax at source when paying a broker's brokerage.
4. Receiving Office claims from RBI
The Receiving Office pays the broker first, then claims the money back from RBI.
5. Monthly payment by ECS
A Receiving Office may pay a broker monthly by ECS, once the broker gives a mandate.
6. Changing a nomination
A holder may change a nomination by writing to the Receiving Office branch.
7. One nominee per investment
An investor can name a different nominee for each investment in one BLA.
8. NRI nominee on one scheme
On the 8% 2003 Savings Bonds, a holder may nominate a Non-resident Indian too.
9. FEMA governs NRI payouts
FEMA's own rules for NRIs then govern how that money is remitted.
Background
1. Updated to 30 June 2018
This direction holds RBI's rules current to 30 June 2018.
2. One place for bond rules
This direction gathers every current rule on Relief and Savings Bonds in one place.
3. RBI reimburses from Nagpur
RBI's own Nagpur office has reimbursed these brokerage claims since July 2002.