E-Paper
Gold bonds open for subscription today: Here’s what you need to know
The Reserve Bank of India (RBI) has fixed the issue price for the sovereign gold bond at Rs 4,639 per gram of the yellow metal. The central bank had said last week that the government will issue these sovereign gold bonds in six tranches beginning Monday till September.
The Series I of the government’s sovereign gold bond scheme for 2020-21 opened for subscription on Monday and will continue till April 24.
The Reserve Bank of India (RBI) has fixed the issue price for the sovereign gold bond at Rs 4,639 per gram of the yellow metal. The central bank had said last week that the government will issue these sovereign gold bonds in six tranches beginning Monday till September.
“The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period,” the RBI said.
The sovereign gold bond scheme was launched in 2015 to reduce the demand for physical gold and shift a part of the domestic savings used to buy the yellow metal into financial savings.
Here’s what you need to know about the scheme:
* The government has decided to offer a discount of Rs 50 per gram to investors, who will apply online and where payment against the application is made through digital mode
* The issue price of a bond will be Rs 4,589 per gram of gold for such investors
* The sovereign gold bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram
* The bonds will have a tenor of eight years but investors will have the option to exit after the fifth year
* The bonds are restricted for sale to resident individuals, Hindu joint families (HUFs), trusts, universities and charitable institutions
* The minimum permissible investment will be 1gm of gold and the maximum limit of subscription shall be 4kg for individuals, 4kg for HUFs and 20kg for trusts and similar entities per fiscal (April-March).
* The gold bond will be sold through banks, except small finance banks and payment banks, the Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges like NSE and BSE.
* This is the timeline of gold bond:
