The Sovereign Gold Bond Scheme 2020-21 (the eights version of it) will be opened for subscription from Monday (November 9). The scheme, issued by the Reserve Bank of India (RBI), will be open till November 13.
The issue price for the Sovereign Gold Bond has been fixed at Rs 5,177 per gram of gold, the RBI said in a statement on Friday.
It further said that the government 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 will be Rs 5,127 per gram of gold, the central bank said.
The eighth tranche of the scheme comes just ahead of the Dhanteras; the yellow metal has always been an integral part of the festival. People buy gold on Dhanteras as a mark to bring prosperity at homes.
Jewellers are betting on recovery and are optimistic that a rebound in the economy (after the Covid-19 induces lockdown) and pent up demand will help boost sales on Dhanteras and the industry is likely to do up to 70 per cent of last year’s business.
Gold prices have been ruling in the range of Rs 52,000 per 10 grams in the country.
The sovereign gold bonds, meanwhile, are denominated in multiples of grams; the scheme 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, trusts, universities and charitable institutions.
The government has fixed the limits for the sovereign gold bond scheme: minimum permissible investment will be 1 gram of gold and the maximum limit of subscription shall be 4 kg for individuals 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.
The gold bonds offer an annual interest rate of 2.50 per cent to investors.