Gold bond issue price fixed at Rs 5.091 / gm gold; the subscription opens on Monday

The issue price for the first tranche of the sovereign gold bond scheme for current fiscals, which will be open for subscription for five days from Monday, is fixed at Rs 5,091 per gram of gold, the Reserve Bank of India (RBI) said on Friday.

The Sovereign Gold Bond Scheme 2022-23 – Series I will be open for subscription on June 20-24, 2022.

“The face value of its bond is 5091 rupees per gram of gold,” the central bank said in a statement.

The Government of India, after consulting with RBI, decided to offer a discount of 50 Rs per gram of the face value of those investors who apply online, and payment against the application is made through digital mode.

“For such investors, the issue price of gold bonds will be Rs 5,041 per gram of gold,” RBI said.

The second tranche (2022-23 Series II) will be available for subscription on August 22-26, 2022.

The Central Bank issues bonds on behalf of the Government of India and these bonds are restricted to the sale of local individuals, Hindu Divided Families (HUF), trusts, universities and charities.

“The term of the SGB (Sovereign Gold Bond) will be for a period of eight years with an option for early redemption after the 5th year, to be exercised on the date on which the interest is due. The minimum allowable investment will be one gram of gold, “the statement said.

In 2021-22, SGBs were issued in 10 tranches totaling Rs 12,991 (27 tonnes).

The maximum subscription limit is 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar persons for a fiscal year.

The price of SGB will be fixed in rupees based on a simple average closing price of 999 gold published by India Bullion and Jewelers Association Limited (IBJA) for the last three business days of the week preceding the subscription monthly cycle.

Investors will be compensated with a fixed interest rate of 2.5 percent per annum, payable every six months on the face value.

SGBs are sold through banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), postal services and both stock exchanges (NSE and BSE).

The Sovereign Gold Bond Scheme was launched in November 2015 in order to reduce the demand for physical gold and to transfer some of the domestic savings used to buy gold into financial savings.

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