The issue price for the first tranche of Sovereign Gold Bond Scheme for current fiscal, which will open for subscription for five days from Monday, has been fixed at Rs 5,091 per gram of gold, the Reserve Bank of India (RBI) said on Friday.
The Sovereign Gold Bond Scheme 2022-23 – Series I will be open for subscription during June 20–24, 2022.
“The nominal value of the bond … works out to Rs 5,091 per gram of gold,” the central bank said in a statement.
The Government of India, in consultation with the RBI, has decided to offer a discount of Rs 50 per gram on the nominal value 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 5,041 per gram of gold,” RBI said.
The second tranche (2022-23 Series II) will be available for subscription during August 22-26, 2022.
The central bank issues the bonds on behalf of the Government of India, and these bonds are restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
“The tenor of the SGB (Sovereign Gold Bond) will be for a period of eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable. The minimum permissible investment will be one gram of gold”, it said.
In 2021-22, SGBs were issued in 10 tranches for an aggregate amount of Rs 12,991 crore (27 tonnes).
The maximum limit of subscription is 4 Kg for individuals, 4 Kg for HUFs and 20 Kg for trusts and similar entities per fiscal year.
The price of SGB will be fixed in rupees on the basis of a simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period.
The investors will be compensated at a fixed rate of 2.5 per cent per annum payable semi-annually on the nominal value.
The SGBs are sold through banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), post offices and the two stock exchanges (NSE and BSE).
The Sovereign Gold Bond Scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings — used for the purchase of gold — into financial savings.