Gold Bond Scheme IV: Issue price fixed at Rs 4,807/gm; subscription opens on July 12

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The issue price for Sovereign Gold Bond Scheme (SGB) 2021-22, which will open for subscription for five days from July 12, has been fixed at Rs 4,807 per gram of gold, the Reserve Bank of India said on July 9. The Sovereign Gold Bond Scheme 2021-22 – Series IV or the fourth tranche will be open for subscription from July 12 – 16, 2021.

The government, in consultation with the Reserve Bank of India (RBI), also provides 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 the gold bond will be Rs 4,757 per gram of gold,” the RBI said. The issue price for Series III, which was open for subscription during May 31 to June 4, 2021, was Rs 4,889/gm.

SGB tranches

Earlier, the government had announced it will issue the Sovereign Gold Bond (SGB) in six tranches from May 2021 to September 2021. The RBI will issue the bonds on behalf of the Government of India. The bonds will be sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and BSE.

A total of Rs 25,702 crore has been raised through the SGB Scheme till end-March 2021 since its inception.  The Reserve Bank had issued 12 tranches of SGB for an aggregate amount of Rs 16,049 crore (32.35 tonnes) during 2020-21. The 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 the yellow metal — into financial savings.

The price of the bond is fixed in Indian rupees on the basis of a simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last three working days of the week preceding the subscription period.

The bonds are denominated in multiples of gram (s) of gold with a basic unit of 1 gram. The tenor of the bond is for a period of 8 years with an exit option after the 5th year to be exercised on the next interest payment dates.

The minimum permissible investment is 1 gram of gold. The maximum limit of subscription is 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF), and 20 kg for trusts and similar entities per fiscal (April-March). The know-your-customer (KYC) norms are the same as that for the purchase of physical gold.