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Gold bond issue price set at Rs 4,889 per gram; subscription opens Monday

By on May 28, 2021 0

The issue price of the Sovereign Gold Bond Scheme 2021-22, which will be open for subscription for five days from May 31, was set at Rs 4,889 per gram of gold, the Reserve Bank of India announced on Friday ( RBI).

The Sovereign Gold Bond Scheme 2021-22- Series-III or the third tranche will be open for subscription from May 31 to June 4, 2021.

Previously, the government announced the issuance of the Sovereign Gold Bond (SGB) in six tranches from May 2021 to September 2021. The RBI will issue the bonds on behalf of the Indian government.

“The face value of the bond based on the simple average closing price of 999 purity gold for the last three working days of the week preceding the subscription period … equals Rs 4,889 per gram of gold”, said the RBI, which issues the bonds on behalf of the central government.

The Indian government, in consultation with the Reserve Bank of India, has decided to offer a discount of 50 rupees per gram less than face value to investors who apply online and payment against demand is made through the digital mode.

“For these investors, the issue price of Gold Bond will be Rs 4,839 per gram of gold,” he said.

Bonds will be sold through Banks (except Small Financing Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), Designated Post Offices and Recognized Stock Exchanges, namely National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd.

A total of Rs 25,702 crore has been raised through the SGB program since its inception until the end of March 2021. The RBI had issued 12 tranches of SGB for a total amount of Rs 16,049 crore (32.35 tonnes) in 2020-21.

The program was launched in November 2015 with the aim of reducing the demand for physical gold and transferring some of the domestic savings – used to buy gold – into financial savings.

The bond price is set in Indian rupees based on the simple average of the closing price of 999 purity gold, published by the India Bullion and Jewelers Association Ltd for the last 3 working days of the week preceding the subscription period.

The bonds will be denominated in multiples of gram (s) of gold with a base unit of one gram. The term of the obligation will be 8 years with an exit option after the 5th year to be exercised on the next interest payment dates.

The minimum authorized investment is one gram of gold. The maximum subscription limit is 4 kg for individuals, 4 kg for HUFs and 20 kg for trusts and similar entities per fiscal year (April-March).

The Know Your Customer (KYC) standards will be the same as for the purchase of physical gold.

The program was launched in November 2015 with the aim of reducing the demand for physical gold and transferring some of the domestic savings – used to buy gold – into financial savings.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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