Next Sovereign Gold Bond issue price fixed at Rs 2,881/gram

The issue price of the next offering of the Sovereign Gold Bond (SGB) scheme opening on Tuesday has been revised slightly upwards to Rs 2,881 per gram, from Rs 2,866 in the previous week, according to the Reserve Bank of India (RBI).

For the SBG subscription during December 26-27, the issue price has been fixed at Rs 2,881 per gram, with settlement on the New Year, January 1, 2018, a RBI release said on Friday.

"The Government of India, in consultation with the Reserve Bank of India, has decided to allow discount of Rs 50 per gram from the issue price to those investors who apply online and the payment is made through digital mode," it said.

The subscription period is from Monday to Wednesday every week, while the bonds will be issued on the succeeding Monday after each subscription period, it added.

The SGB 2017-18 - Series-III is open for public subscription from October 9 to December 27, 2017. Bonds under the scheme earn an interest of 2.50 per cent per annum, payable every six months on initial investment.

The bonds with a tenure of eight years and an exit option from the fifth year are sold through banks, post offices, Stock Holding Corporation of India and recognised stock exchanges -- National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

SGBs are denominated in multiples of gram of gold with a minimum unit of one gram and can also be held in demat form for ease of trading.

The scheme was launched in November 2015 as an alternative to purchasing physical gold and mobilise the idle gold held by households and institutions into productive use in the long run.

--IANS

bc/vd