Gold bond issue price fixed at Rs 4,912 per gram

The issue price for Sovereign Gold Bond has been fixed at Rs 4,912 per gram of gold, the Reserve Bank of India said in a statement on Friday.

Sovereign Gold Bond Scheme 2020-21 – Series XI will be open for subscription from February 01 to February 05, 2021.

“The nominal value of the bond…works out to Rs 4,912,” the RBI said.

The value of the bond is based on the simple average closing price published by India Bullion and Jewellers Association Ltd (IBJA) for gold of 999 purity of the last three business days of the week preceding the subscription period (January 27-29, 2020).

The central bank further said the government, in consultation with the RBI, has decided to offer a discount of Rs 50 per gram to those investors applying online and the payment against the application is made through digital mode.

“For such investors, the issue price of Gold Bond will be Rs 4,862 per gram of gold,” the central bank said.

The issue price for the Bonds (Series X) that were open for subscription from January 11 to January 15, 2021, was Rs 5,104 per gram of gold.

Sovereign Gold Bond 2020-21 is issued by Reserve Bank India on behalf of the central government.

The Bonds are denominated in multiples of gram (s) of gold with a basic unit of 1 gram and the tenor of the SGB will be eight years with exit option after the fifth year to be exercised on the interest payment dates.

The bonds are restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.

The minimum permissible investment will be 1 gram of gold and the maximum limit of subscription shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March).

The gold bond will be sold through banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India (SHCIL), designated post offices, and recognised stock exchanges (NSE and BSE).

The sovereign gold bond scheme was launched in November 2015 with an 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.

As per the RBI Annual Report 2019-20, a total of Rs 9,652.78 crore (30.98 tonnes) has been raised through the Sovereign Gold Bonds Scheme (37 tranches) since its inception in November 2015. The RBI issued 10 tranches of Sovereign Gold Bonds (SGBs) for an aggregate amount of Rs 2,316.37 crore (6.13 tonnes) during 2019-20.

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