KOLKATA: On Friday, the Reserve Bank of India released a statement, announcing that the issue price for the Sovereign Gold Bond (SGB) has been set at ₹4,639 for every gram of gold. It added that The Sovereign Gold Bond Scheme 2020-21-Series I will be open for subscription from 20th to 24th of April.
Furthermore, the RBI stated,”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…works out to ₹4,639 per gram of gold.”
Earlier this week, the central bank had announced that our government will issue Sovereign Gold Bonds (SGBs) in six tranches, beginning April 20 till September.
Specifically, the Reserve Bank of India (RBI) will issue Sovereign Gold Bond 2020-21, on behalf of the government.
The statement added that the government has also decided to offer a discount of ₹50 per gram to investors who will applying online. This discount is also applicable where payment, against the application, is made digitally (through UPI). precisely speaking, for such investors, the issue price of bond will be ₹4,589 per gram of gold.
These bonds are restricted for sale to resident individuals, Hindu Undivided Families(HUF), trusts, universities and charitable institutions.
The bonds will be denominated in multiples of gram(s) of gold, with the basic unit of 1 gram. Additionally, the tenor of the SGB will be 8 years with exit option after the fifth year. This option to be exercised on the interest payment dates.
To clarify, The minimum permissible investment will be 1 gram of gold and the maximum limit of subscription shall be 4 Kg for individuals, 4 Kg for HUFs and 20 Kg for trusts and similar entities per fiscal year (April-March).
The gold bond will be sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India (SHCIL), designated post offices, and recognized stock exchanges (NSE and BSE).
The Sovereign Gold Bond Scheme was launched back in November 2015. Its objective was to reduce the demand for physical gold and shift a part of the domestic savings, used for the purchase of gold, into financial savings.