Gold bond issue price fixed at Rs 4,732/gm; subscription opens Monday

The issue price for the next tranche of Sovereign Gold Bond Scheme 2021-22, which will open for subscription for five days from August 30, has been fixed at Rs 4,732 per gram of gold, the RBI said on Friday.

The Sovereign Gold Bond Scheme 2021-22 - Series VI will be open for subscription for the period August 30 to September 3, 2021.

"The nominal value of the bond...works out to Rs 4,732 per gram of gold," the central bank said.

The government, in consultation with the Reserve Bank of India (RBI), also provides a discount of Rs 50 per gram less than the nominal value to those investors applying online and where the payment against the application is made through digital mode.

"For such investors, the issue price of Gold Bond will be Rs 4,682 per gram of gold," the RBI said.

Earlier, the government had announced issuance of the Sovereign Gold Bond (SGB) in six tranches from May 2021 to September 2021. The RBI issues the bonds on behalf of the Government of India.

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 National Stock Exchange of India Limited and BSE.

A total of Rs 25,702 crore has been raised through the SGB Scheme since its inception till end-March, 2021. The Reserve Bank had issued 12 tranches of SGB for an aggregate amount of Rs 16,049 crore (32.35 tonnes) during 2020-21.

The scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings used for the purchase of the yellow metal into financial savings.

Price of bond is fixed in Indian rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last three working days of the week preceding the subscription period.

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 HUFs and 20 kg for trusts and similar entities per fiscal (April-March).

The know-your-customer (KYC) norms are the same as that for purchase of physical gold.