 "gold bonds")
The Reserve Bank of India (RBI) has announced the final price for the first tranche of the sovereign gold bond (SGB) scheme issued on November 30, 2015 (SGB 2015-I), at Rs 6,132 per unit. The final redemption date is November 30, 2023.
The issue price of these bonds was around Rs 2,540 per unit.
The interest on the gold bonds commences from the date of its issue, which has a fixed rate of interest at 2.75 per cent per annum on the amount of initial investment.
In the sovereign gold bond scheme, the gold bonds are repayable on the expiration of eight years from the date of the issue of the gold bonds.
The redemption price of SGB is based on the simple average of the closing price of gold of 999 purity of the week (Monday-Friday), preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
The first tranche of the SGB was open for subscription from November 5, 2015, to November 20, 2015. The bonds were issued on November 30, 2015.
The total subscription, denominated in units of gold, was 915,953 grams amounting to Rs 246 crore. The top 10 receiving offices in terms of subscription amount were HDFC Bank, ICICI Bank, YES Bank, Allahabad Bank, Bank of India, Andhra Bank, Karur Vysya Bank, DCB Bank, State Bank of India, and Federal Bank.
SGBs were launched to reduce the demand for physical gold by providing an alternative investment instrument linked to gold. The bonds were sold through scheduled commercial banks and designated post offices.
