Govt to invite papers for more gold bonds

Govt to invite papers for more gold bonds

Hoping to mobilise more money from households, the government is inviting applications for another tranche of gold bonds from Monday.

These bonds will be issued on March 17. Till now, the government has mobilised Rs 3,060 crore through such bonds which were launched in November 2015.

The bonds, the last in this fiscal 2016-17, can be bought through cash payment up to a maximum of Rs 20,000. Any amount above this will be paid through cheque, demand draft or e-banking. The maximum amount subscribed by an entity will be 500 grams.

The bonds will be sold through banks, Stock Holding Corporation of India (SHCIL), designated post offices and recognised stock exchanges such as National Stock Exchange of India and Bombay Stock Exchange,” the finance ministry said.

“The (Sovereign Gold Bond) investors will be compensated at a fixed rate of 2.50% per annum payable semi-annually on the nominal value of investment,” the ministry said.

The bonds will be restricted for sale to resident Indian entities including individuals, Hindu undivided family, trusts, universities and charitable institutions.

The bonds will be denominated in multiples of gram(s) of gold with a basic unit of one gram. The tenor of the bonds will be for a period of eight years with exit option from fifth year to be exercised on the interest payment dates. The minimum permissible investment is one gram gold.

“Price of Bond will be 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 for the week (Monday to Friday) preceding the subscription period. The issue price of the Gold Bonds will be Rs 50 per gram less than the nominal value,” the ministry said in a statement.

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