Price of bond is fixed in Indian rupees on the basis of simple average of closing price of gold of 999 purity.
Price of bond is fixed in Indian rupees on the basis of simple average of closing price of gold of 999 purity.

First tranche of sovereign gold bond scheme opens for subscription today: All you need to know

The sovereign gold bond scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings - used for the purchase of gold - into financial savings.
By hindustantimes.com | Edited by Amit Chaturvedi, Hindustan Times, New Delhi
PUBLISHED ON MAY 17, 2021 07:19 AM IST

The first tranche of Sovereign Gold Bonds 2021-22 will be open for subscription for five days from Monday. The bonds will be issued in six tranches from May 2021 to September 2021, the finance ministry has said in a statement.

While the subscription period for 2021-22 Series I will be from May 17-21, the bonds will be issued on May 25.

Here is everything you need to know about the government-run scheme:

  • The Reserve Bank of India (RBI) will issue the bonds on behalf of the Government of India. "The nominal value of the bond based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period...works out to 4,777 per gram of gold," the central bank said in a statement last week.
  • These can be bought by resident individuals, Hindu Undivided Families (HUFs), trusts, universities as well as charitable institutions but with a limit on investment.
  • The tenor of the bonds is for a period of 8 years with an exit option after the fifth year to be exercised on the next interest payment dates.
  • The government, in consultation with the RBI, has decided to offer a discount of 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode.
  • These bonds will be sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
  • Minimum permissible investment is 1 gram of gold. The maximum limit of subscription is 4 kg for individual, 4 kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March).
  • The RBI said that know-your-customer (KYC) norms will be the same as that for the purchase of physical gold. This means that Voter ID, Aadhaar PAN or TAN cards and passport will be required as KYC documents.

The sovereign gold bond scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings - used for the purchase of gold - into financial savings.

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