Sovereign Gold Bond price fixed at Rs 6,263/gm; issues opens Monday

The issue price of the next tranche of Sovereign Gold Bond, opening for subscription for five days from Monday, has been fixed at Rs 6,263 per gram, the Reserve Bank said in a statement on Friday. The Sovereign Gold Bond Scheme 2023-24 – Series IV will be open for subscription during February 12-16, 2024.

“The nominal value of the bond … works out to Rs 6,263 per gram of gold,” the central bank said.

The Government of India, in consultation with the Reserve Bank, has decided to offer a discount of Rs 50 per gram less than the nominal value to those investors applying online and making the payment against the application through digital mode.

For such investors, the issue price of Gold Bond will be Rs 6,213, the RBI said.

The SGBs will be sold through scheduled commercial banks (except small finance banks, payment banks and regional rural banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

The price of SGB is 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 (IBJA) for the last three working days of the week preceding the subscription period. The investors are compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value. The maximum limit of subscription is 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year.

The tenor of the SGB will be eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.

The Reserve Bank of India issues the bonds on behalf of the Government of India.

The bonds can be used as collateral for loans.

Know Your Customer (KYC) norms will be the same as that for the purchase of physical gold.

The sovereign gold bond scheme was launched in November 2015 with the objective to reduce the demand for physical gold and shift a part of the domestic savings — used for the purchase of gold — into financial savings.

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