The fourth instalment of the Sovereign Gold Bond (SGB) scheme, issued by the Reserve Bank of India (RBI) on behalf of the government, will open for subscription for five days from Monday.
The Sovereign Gold Bond Scheme 2020-21-Series IV will be opened for subscription for the period between July 6 and July 10.
The issue price for the Sovereign Gold Bond has been fixed at Rs 4,852 per gram of gold, RBI said in a statement on Friday.
“The nominal value of the bond based on the simple average closing price (published by the India Bullion and Jewellers Association) for gold of 999 purity of the last three working days of the week preceding the subscription period…works out to Rs 4,852 per gram of gold,” RBI said.
It further said the government, in consultation with the RBI, has decided to offer a discount of Rs 50 per gram less than 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 4,802 per gram of gold,” the central bank said.
Sovereign Gold Bonds are part of the central government’s market-borrowing programme.
The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the tenor of the Sovereign Gold Bond will be eight years with exit option after the 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 1 gram 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 bonds will be sold through banks, except small finance banks and payment banks, Stock Holding Corporation of India (SHCIL), designated post offices and recognised stock exchanges (NSE and BSE).
The issue price for the bonds, which were open for subscription from June 8-12, was Rs 4,677 per gram of gold.
The government will issue Sovereign Gold Bonds in six tranches from April 20 till September, the central bank had announced in April.
The scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings, used to buy gold, into financial savings.