The Reserve Bank of India (RBI) has said the issue price for the next tranche of Sovereign Gold Bonds (SGBs) has been fixed at Rs 4,590 per gram of gold.
The central bank had said last month that the government will issue Sovereign Gold Bonds in six tranches, beginning April 20 till September. Sovereign Gold Bond 2020-21 has been issued by RBI on behalf of the government of India.
The Sovereign Gold Bond Scheme 2020-21-Series II will be opened for subscription from May 11, 2020, to May 15, 2020.
“The nominal value of the bond based on the simple average closing price (published by the India Bullion and Jewellers Association Ltd) for gold of 999 purity of the last three business days of the week preceding the subscription period…works out to Rs 4,590 per gram of gold,” RBI said in the statement on Friday.
The issue price for Series I—April 20 to 24, 2020—was Rs 4,639 per gram of gold.
RBI said the government has decided to offer a discount of Rs 50 per gram less than the nominal value to investors who will apply online and make payment against the application through digital mode.
The issue price of gold bond for such investors will be Rs 4,540 per gram of gold, it said.
The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the tenor of the SGB will be eight years with exit option after fifth year to be exercised on interest payment dates.
Only resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions can buy the bonds.
The minimum permissible investment will be 1gr of gold and the maximum limit of subscription shall be 4kg for individuals and HUFs, and 20kg for trusts and similar entities per fiscal (April-March).
These Sovereign Gold Bonds will be sold through banks, except small finance banks and payment banks, Stock Holding Corporation of India (SHCIL), designated post offices, and stock exchanges (NSE and BSE).
The sovereign gold bond scheme was launched in November 2015 with an aim to reduce demand for physical gold and shift a part of domestic savings, used for buying gold, into financial savings.
