The subscription of Sovereign Gold Bond (SGB) will open today. SGBs are government-backed securities denominated in grams of gold. They are substitutes for holding physical gold.
The issue price for Sovereign Gold Bond Scheme 2021-22 Series IV has been fixed at Rs 4,807 per gram of gold. The subscription window will remain open for five days (July 12 to 16).
Investors can buy the bonds by paying the issue price in cash. The bonds will be redeemed in cash on maturity.
The Bond is issued by the Reserve Bank on behalf of the Government of India.
“The nominal value of the bond works out to Rs 4,807 per gram of gold,” the RBI said in a statement.
The government, in consultation with the RBI, provides a discount of Rs 50 per gram 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 4,757 per gram of gold,” the RBI said.
The bonds are sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz National Stock Exchange of India Limited and BSE.
The bonds are denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor of the bond is for a period of 8 years with exit option after 5th year to be exercised on the next interest payment dates.
Minimum permissible investment is 1 gram of gold. The maximum limit of subscription is 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities per fiscal (April-March).
A total of Rs 25,702 crore has been raised through the SGB Scheme till end-March 2021 since its inception.