Govt to issue 4 tranches of sovereign gold bonds in H2, to offer 2.5% annual interest to investors

By: |
October 22, 2021 3:15 AM

The last tranche of bonds in the current fiscal can be subscribed to by handing out applications between February 28 and March 4, and the papers will be issued to the eligible candidates on March 8.

The investors will get the interest (2.5%) payable semi-annually on the nominal value of the investment. The minimum permissible investment is one gram and the maximum limit is 4 kg for individuals and 20 kg for trusts and similar entities per fiscal.The investors will get the interest (2.5%) payable semi-annually on the nominal value of the investment. The minimum permissible investment is one gram and the maximum limit is 4 kg for individuals and 20 kg for trusts and similar entities per fiscal.

The government will launch four tranches of sovereign gold bonds between October 2021 and March 2022, offering a 2.5% annual interest to investors. This is part of the Centre’s efforts to discourage the import of precious metals and curb its debilitating impact on the trade balance.

Applications for subscribing to the first tranche of gold bonds during the second half of the fiscal will be accepted from October 25 to 29, according to a finance ministry statement. The bonds will be issued to eligible applicants on November 2. Applications for the second tranche will be received from November 29 to December 3 and the bonds will be issued on December 7. Similarly, applications for the third tranche will be accepted from January 10 to 14 and bonds will be issued on January 18.

The last tranche of bonds in the current fiscal can be subscribed to by handing out applications between February 28 and March 4, and the papers will be issued to the eligible candidates on March 8.

The bond’s price will be fixed based on the average closing rate of gold of 999 purity, as published by the India Bullion and Jewellers Association (IBJA), for the last 3 working days of the week preceding the subscription period. Those subscribing online or paying through digital mode will get a Rs 50 discount.

The Bonds will be sold through scheduled commercial banks (except small finance and payment banks), Stock Holding Corporation of India, Clearing Corporation of India, designated post offices, National Stock Exchange and Bombay Stock Exchange.

The investors will get the interest (2.5%) payable semi-annually on the nominal value of the investment. The minimum permissible investment is one gram and the maximum limit is 4 kg for individuals and 20 kg for trusts and similar entities per fiscal.

The tenor of the bond will be for eight years, with an exit option after the fifth year to be exercised on the next interest payment dates. The redemption price will be based on the simple average closing price of gold (999 purity) of the previous three working days, as published by IBJA. The interest on the bonds is taxable but capital gains tax arising out of the redemption of the papers has been exempted for individuals. The bonds are tradable on stock exchanges.

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