Sovereign Gold Bond to open on Monday, issue price fixed at Rs 4,677/gm
The third 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, June 8.
The Sovereign Gold Bond Scheme 2020-21 Series III will be opened for subscription for June 8 to June 12. Sovereign Gold Bonds are part of the central government’s market-borrowing programme.
RBI said in a statement on Friday that the issue price for Sovereign Gold Bond has been fixed at Rs 4,677 per gram of gold.
“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, i.e. June 03 – June 05, 2020, works out to Rs 4,677 per gram of gold,” the RBI said.
The central bank said the government has also decided to offer a discount of Rs 50 per gram on the nominal value to investors applying online, and making the payment against application through digital mode.
For such investors, the issue price of the bond will be Rs 4,627 per gram of gold.
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 central bank in April had announced that the government will issue Sovereign Gold Bonds in six tranches from April 20 till September.