The third tranche of Sovereign Gold Bond Scheme has opened for subscription today. The issue price of the scheme, which will last for five days, has been fixed at Rs 4,889 per gram of gold.
Earlier, the government had announced to sell the Sovereign Gold Bonds (SGB) in six tranches from May 2021 to September 2021. The RBI will issue the bonds on behalf of the Indian Government.
“The nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three working days of the week preceding the subscription period…works out to Rs 4,889 per gram of gold,” said the RBI, which issues the bonds on behalf of the central government.
A discount of Rs 50 per gram less than the nominal value will be offered to those investors applying online and the payment against the application is made through digital mode. “For such investors, the issue price of Gold Bond will be Rs 4,839 per gram of gold,” the central bank said.
The bonds will be sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognized stock exchanges viz., National Stock Exchange and Bombay Stock Exchange.
In November 2015, the Modi government launched the scheme with an aim to reduce the demand for physical gold and shift a part of the domestic savings — used for the purchase of gold — into financial savings.
Under the scheme, minimum permissible investment is one gram of gold. The maximum limit of subscription is 4 kg for an individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).
The bonds will be denominated in multiples of gram(s) of gold with a basic unit of one gram. The tenor of the bond will be for a period of 8 years with exit option after 5th year to be exercised on the next interest payment dates.