Government, in consultation with the Reserve Bank of India, decides to issue Second Tranche of Sovereign Gold Bonds Scheme 2016



Government, in consultation with the Reserve Bank of India, decides to issue Second Tranche of Sovereign Gold Bonds Scheme 2016; Applications for the bonds to be accepted from 18th January to 22nd January, 2016; Bonds to be issued on February 8, 2016 and will be sold through banks, Stock Holding Corporation of India Limited (SHCIL) and designated post offices. 



 The Government of India, in consultation with the Reserve Bank of India, has decided to issue second tranche of Sovereign Gold Bonds. Applications for the bonds will be accepted from January 18, 2016 to January 22, 2016. The Bonds will be issued on February 8, 2016. The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL) and designated post offices. The borrowing through issuance of the Bond will form part of market borrowing programme of the Government of India.

It may be recalled that Honourable Finance Minister had announced in Union Budget 2015-16 about developing a financial asset, Sovereign Gold Bond, as an alternative to purchasing metal gold. Accordingly, the first tranche was open for subscription from November 05, 2015 to November 20, 2015. The features of the Bond are given below:
Sl. No
Item
Details
1
Product name
Sovereign Gold Bond 2016
2
Issuance
To be issued by Reserve Bank India on behalf of the Government of India.
3
Eligibility
The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities and charitable institutions.
4
Denomination
The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
5
Tenor
The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.
6
Minimum size
Minimum permissible investment will be 2 units (i.e. 2 grams of gold).
7
Maximum limit
The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). A self-declaration to this effect will be obtained.
8
Joint holder
In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only.
9
Frequency
The Bonds will be issued in tranches. Each tranche will be kept open for a period to be notified. The issuance date will also be specified in the notification.
10
Issue price
Price of Bond will be fixed in Indian Rupees on the basis of the previous week’s (Monday–Friday) simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd. (IBJA).
11
Payment option
Payment for the Bonds will be through cash payment upto a maximum of Rs. 20,000 or demand draft or cheque or electronic banking.
12
Issuance form
Government of India Stock under GS Act, 2006. The investors will be issued a Holding Certificate. The Bonds are eligible for conversion into demat form.
13
Redemption price
The redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA.
14
Sales channel
Bonds will be sold through banks, SCHIL and designated Post Offices, as may be notified, either directly or through agents.
15
Interest rate
The investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.
16
Collateral
Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.
17
KYC Documentation
Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required.
18
Tax treatment
The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold.
19
Tradability
Bonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI.
20
SLR eligibility
The Bonds will be eligible for Statutory Liquidity Ratio.
21
Commission
Commission for distribution shall be paid at the rate of 1% of the subscription amount.
                         
                                                   *******
Finance Minister Shri Arun Jaitley: Asks all the banks to make their best efforts to reach-out to potential investors to invest in the Second tranche of the Sovereign Gold Bonds which will be kept open from 18th January, 2016 to 22nd January, 2016 

                                    The Union Finance Minister Shri Arun Jaitley asked all the banks to make their best efforts to reach-out to potential investors to invest in the Second tranche of the Sovereign Gold Bonds which will be kept open from 18th January, 2016 to 22nd January, 2016. He said that this is an attractive opportunity for the investors. The Finance Minister was addressing the CMDs of the banks through video conferencing here today. He also discussed the banks’ preparedness for the second tranche of the Sovereign Gold Bond Scheme. He said that the Government is keen to expand the scheme in the subsequent tranches as well. This was followed by a review by Shri Shaktikanta Das, Secretary, Department of Economic Affairs (DEA) with all the CMD’s of the Banks.  All the banks assured to activate their branch network to inform the investors about the advantages of the bonds.
To increase the awareness among depositors, the Government is continuing with the Media campaign on AIR and FM radio, in print media and through Mobile SMS campaign. Information is also available on the website www.finmin.nic.in/swarnabharat and on the toll free number 18001800000.
  The First Tranche of Sovereign Gold Bond (SGB) was issued on behalf of the Government of India by RBI at the branches of scheduled commercial banks and designated post offices through its e-kuber system from 5th November, 2015 to 20th November, 2015 . A total of 62169 applications were received for a total subscription of 915.953 Kilograms of gold amounting to Rs 246.20 Cr by the Banks and Post Offices.  
       Earlier, the Government had launched Sovereign Gold Bond on 5th November, 2015. The main objectives of the scheme is to reduce the demand for physical gold and shift a part of the gold imported every year for investment purposes into financial savings through Gold Bonds.
Sovereign Gold Bonds are issued by RBI on behalf of the Government of India on payment of the required amount in rupees and are denominated in grams of gold. The Bonds are restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions. Minimum permissible investment is 2 grams of gold to be paid in rupees. The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). Government has fixed the rate of interest for the year 2015-16 as 2.75 % per annum , payable on a half yearly basis.  The bonds will be available both in demat and paper form. The rate for the Bonds will be fixed on the basis of simple average of closing price for gold of 999 purity of the previous week published by the India Bullion and Jewellers Association (IBJA). These bonds will be available at Banks and Post Offices. The tenor of the Bond will be for a period of 8 years with exit option from 5th year onwards to be exercised on the interest payment dates. KYC norms will be the same as that for gold. Exemption from capital gains tax will also be available.  On maturity, the investor will get the equivalent rupee value of the quantum of gold invested at the then prevailing price of gold.

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Government Approves Five (5) Proposals of Foreign Direct Investment (FDI) Amounting to Rs. 6050.10 Crore Approximately 


            Based on the recommendations of Foreign Investment Promotion Board (FIPB) in its 229th meeting held on 21st December 2015, the Government has approved five (05) proposals of Foreign Direct Investment (FDI) amounting to Rs. 6050.10 crore. 

The following five (05) proposals have been approved:

S. No.
Item No
Name of the applicant
Gist of the proposal
Sector
FDI (in Rs. Crore)
1
5
M/s Sai Life Sciences Limited 
Approval has been sought for :-
Alpha TC Holdings Pte. Ltd to transfer its shares held in Sai Life to its WoS Alpha FDI Holdings Pte Ltd  and deletion of condition of compounding by the Reserve Bank of India imposed in the approval letter dated 14.08.2015
Pharma
Nil
2
8
M/s Health Media Publishing M/s Private Ltd
Approval has been sought for the transfer of its 99.90% shares currently held by Mr Ajit Patel, an NRI to Wellness Technology and Media Private Ltd, UK.
Print media
Nil
3
9
M/s Recipharm Participation B.V
Approval has been sought for :-
1. Incorporating a WoS in India, which will be engaged in the business of investing in other companies.
Pharma
1050



2. Making downstream investment through the WoS (as mentioned above) in an existing pharmaceutical manufacturing company, Nitin Lifesciences Limited, by buying out shares from the promoters thereby increasing foreign equity to 74%.


4
11
M/s Buimerc Core Investments Private Limited
Approval has been sought by M/s Buimerc Core Investments Private Limited for transferring of 100% equity shares of NRI investors and Resident Investors to Buimerc Corporation FZE.
CIC
0.10
5
16
M/s Cadila Healthcare Ltd.
Approval for fresh equity infusion of up to Rs. 5000 Crores under FDI Route by QIBs through Qualified Institutional Placement under Chapter VIII (QIP) of SEBI ICDR Regulations on a Private Placement basis for the expansion of the business.
Pharma
5000

            The following six (06) proposals have been deferred:

S. No.
Item No
Name of the applicant
Gist of the proposal
Sector
1
1
M/s Gulf Quarry General Trading F.Z.C.
Approval has been sought for investment in a new factory in Amritsar for crushing of gypsum rocks to make gypsum powder, manufacturing of gypsum board etc in an Indian company which is yet to be incorporated.
Mining
2
2
M/s International Asset Reconstruction Company Private Limited
Approval has been sought for purchase of its shares by KKR India Reconstruction Pte. Ltd, Singapore, thereby increasing the foreign equity from 58.75% to 78.96%.
Financial services
3
4
M/s Raheja QBE General Insurance Company Limited 
approval for transfer of  23% shares currently held by Prism Cement Limited to QBE Asia Pacific Holdings Limited, Hong Kong, thereby increasing the foreign shareholding in the company from 26% to 49%.
Insurance 
4
10
M/s   Equitas Holdings Private Limited  
Approval has been sought by M/s Equitas Holdings Private Limited for undertaking an IPO in accordance with the provisions of the SEBI ICDR 2009. The Issue comprises a fresh issue and an offer for sale of Equity Shares by certain existing shareholders to eligible non-resident investors including FIIs/FPIs/NRIs.
CIC
5
13
M/s HSBC Securities and Capital Markets (India) Private Limited
Approval has been sought for: -
I. Merger of the FIPB approval letter of even no FCII 229(1994)/300(1994) dated 13.05.1994 (read along with 18 amendments) and Approval letter of even no FC II 160(2005)/157(2005) dated 21.06.2005.
II. Incorporating a Wholly Owned Subsidiary (WoS) which will act as a trustee company to HSBC Mutual Fund.
III. HSBC InvestDirect Financial Services(India) Limited[WoS of HSBC Invest Direct (India) Ltd] to engaged into additional activities
NBFC
6
17
M/s Holcim (India) Private Limited
Approval sought by M/s Ambuja Cements Ltd., for the acquisition of 24% shares in its holding company, Holcim (India) Pvt Ltd from the latter’s holding company M/s Holderind Investments Ltd (NR) and subsequent reverse merger through a share swap.
Investing

The following two (02) proposals have been rejected:

S. No.
Item No
Name of the applicant
Gist of the proposal
Sector
1
7
Mr. Mokeme Chiwetal Izuchukwu, Nigeria
Approval has been sought to set up a Limited Liability Partnership (LLP) in India for Cash & Carry Wholesale Trading/Wholesale Trading (Including sourcing from MSEs).
LLP
2
12
M/s Lanarth Developers Private Limited
Approval has been sought by Lanarth Developers Private Limited for the extension of period of redemption for 10,80,000 (11.25%) Preference shares of Rs.100/- issued to its existing foreign shareholder Baniyas International Private Limited  maturing on March 30, 2015 by three years i.e. on and upto March 30, 2018
Construction

The following three (03) proposals do not lie before FIPB:

S. No.
Item No
Name of the applicant
Gist of the proposal
Sector
1
 06
M/s Elanco India Private Limited
Approval has been sought for further foreign investment of USD 5 million to 10 million over the next 2 to 3 years from its existing shareholders (via a rights issue) i.e. M/s Elanco Nederlands Holding B.V and M/s Lilly Nederlands Holding B.V  at regular intervals in tranches.
Pharma
2
14
M/s Datamark Prodapt India BPO Private Limited, Chennai
The approval has been sought  for change into its designated partner who has acquired 0.02% of shares of the company resulting change into the shareholding pattern of the company
LLP
3
15
M/s Volvo Asset Finance lndia Pvt Ltd
An NBFC has proposed to offer operating lease to its customers, for which company has been advised to seek FIPB approval.
NBFC

Part (i) of the following proposal does not lie before FIPB and part (ii) has been rejected:

S. No.
Item No
Name of the applicant
Gist of the proposal
Sector
1
3
M/s MPC Rhine River Limited
(i)         Sell and transfer its shareholding in AKME Rhine River Projects Private Limited to a third party buyer, whether resident or non- resident, whether directly or indirectly, and/or
(ii)       Transfer the construction development project being undertaken by AKME Rhine River Projects Private Limited to a third party buyer, whether resident or non- resident without any further requirement of Government approval upon identification of the third party buyer.
Construction


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