Govt to issue gold bonds from Jul 28

Govt to issue gold bonds from Jul 28

Ninth tranche since November 2015

Govt to issue gold bonds from Jul 28

The government will issue yet another tranche of sovereign gold bonds from July 28, applications for which have been invited from July 10.

This will be the ninth tranche of gold bond since the scheme was launched in November 2015. The government has collected Rs 5,400 crore till date, through these bonds, against the target of Rs 15,000 crore in the first year of the launch.

The bonds are a security for gold kept in the form of jewellery or any physical form denominated in grams. These are issued by the Reserve Bank on behalf of the government. Gold in this form frees the investor from bearing the risks and costs of storage.

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

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

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

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