The Reserve Bank of India (RBI) announced that the next tranche of Sovereign Gold Bonds (SGB), set to open for subscription from February 12 to February 16, 2024, will have an issue price of Rs 6,263 per gram. This is part of the Sovereign Gold Bond Scheme 2023-24 – Series IV.
Investors applying online and making payments through digital modes will receive a discount of Rs 50 per gram, resulting in an issue price of Rs 6,213 per gram.
These bonds will be available through various channels, including scheduled commercial banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, and major stock exchanges like the National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
The price of SGB is determined in Indian rupees based on the simple average of the closing price of gold of 999 purity, as published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days preceding the subscription period.
Investors will receive a fixed interest rate of 2.50 per cent per annum, payable semi-annually on the nominal value. The maximum subscription limit is 4 kg for individuals and Hindu Undivided Families (HUF), and 20 kg for trusts and similar entities per fiscal year.
The tenor of the SGB will be eight years, with the option of premature redemption after the fifth year, to be exercised on the date when interest is payable.
These bonds, issued on behalf of the Government of India, can be used as collateral for loans, and the Know Your Customer (KYC) norms for purchasing physical gold apply to SGB purchases as well.
The Sovereign Gold Bond Scheme, launched in November 2015, aims to reduce the demand for physical gold and encourage the shift of domestic savings from gold purchases to financial savings.
(With Agency Inputs)
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