India Development Bonds Scheme 1991

 
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GSR 597(E), DATED 21-9-1991

In exercise of the powers conferred by clause (a) of sub-section (1) of section 5 of the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 (41 of 1991) the Reserve Bank of India hereby specifies the following scheme, namely:--

1. Short title and Commencement.

(1) This scheme may be called the India Development Bonds Scheme, 1991, (2) It shall come into force on the date of its publication in the Official Gazette.

2. Definitions.

In this Scheme, unless the context otherwise requires,--

(a) "Act" means the Remittances of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 (41 of 1991);

(b) "Foreign Exchange Bonds" means India Development Bonds (herein­after referred to as FEBs) in the nature of promissory notes, denomi­nated in US Dollars or, as the case may be, Pound Sterling issued by the State Bank of India in accordance with this Scheme;

(c) "State Bank of India" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955);

(d) all other words and expressions used in this scheme but not defined, and defined in the Act and the Foreign Exchange Regulation Act, 1973 (46 of 1973), shall have the meanings respectively assigned to them in those Acts.

3. Face value of FEBs.

The FEBs shall be issued in denominational value of US Dollars 500, US Dollars 1,000, US Dollars 5,000, US Dollars 10,000 and US Dollars 50,000 or, as the case may be, in denominational value of Pound Sterling 250, Pound Sterling 500, Pound Sterling 1,000, Pound Sterling 5,000, Pound Sterling 10,000 and Pound Sterling 20,000.

4. Period of maturity.

The period of maturity of FEBs shall be five years from the date of allotment.

5. Persons who are eligible to apply for FEBs.

(1) Non-resident Indians (hereinafter referred to as NRIs). Overseas Corporate Bodies (hereinafter referred to as OCBs) and banks acting in fiduciary capacity on behalf of NRIs and OCBs may apply for the FEBs.

(2) Applications may also be made in the name of a minor, who is an NRI, through his guardian.

(3) Banks acting in fiduciary capacity on behalf of NRIs or OCBs or both may not disclose the names and addresses of NRIs or OCBs on whose behalf investment isbeing made, but, at no stage during the currency of FEBs, the banks shall hold these FEBs on behalf of any person other than NRIs or OCBs. Provided that the banks may be allowed to hold the FEBs on behalf of NRIs or OCBs other than those NRIs or OCBs on whose behalf investments in FEBs were made in the first instance,

6. Joint Holdings.

(1) The FEBs may be held in joint names of not more than two NRIs in the form of "former or Survivor",

(2) The FEBs may also be held in the form of "Former or Survivor." by an NRI jointly with any person of Indian nationality, whether resident in India or not, and in such a case, the NRI shall be the first holder of the FEBs.

(3) The principal amount of the FEBs and the interest earned thereon shall be payable only to the first holder of the FEBs.

7. Addition of Joint Holder.

Subject to the provision of clause (1) of Paragraph 6, the holder of FEBs may be allowed to add as joint holder any other person who may be either an NRI or a resident in India, with instructions for payment to "Former or Survivor".

8.Rate of interest and interest option.

(1) The rate of interest payable in respect of FEBs issued in US Dollars or, as the case may be, PoundSterlingshall be the...

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