Heavy demand forces govt to shift issue date of gold bonds

Heavy demand for sovereign gold bonds (SGB), an instrument to wean away people from physical gold, has forced  the government to postpone its issue date to September 30 from the earlier September 23.

“The Government of India in consultation with the Reserve Bank of India (RBI),  had notified the issuance of SGB, 2016-17 Series II. The tranche was opened for subscription from September 1 to 9, 2016. The bonds were to be issued on September 23,” the finance ministry said in a statement.

”A large number of applications have been received by banks and post offices. To enable smooth uploading of applications into RBI’s E- Kuber system, particularly by the post offices, it has since been decided to shift the issue date of the Sovereign Gold Bonds from September 23 to September 30,” it said.

So far the government has realised close to eight tonnes of gold worth Rs 2,250 crore since its launch in November last year. Earlier in the day, the finance ministry said the amount realised through the fifth tranche of the SGB scheme is expected to cross Rs 820 crore. This was mobilised through over two lakh applications representing around 2.37 tonnes of gold.

Aggressive marketing

The government will come up with more tranches in 2016-17 and the next tranche of SGB is expected around third week of October with additional features to attract more consumers.

The aggressive marketing of the product by the government including through its receiving offices such as banks, post offices, NSE and BSE helped in eliciting such an encouraging response, the ministry said.

SGB earns an interest rate of 2.75% per annum, semi-annually payable on initial investment.