Soveriegn Gold Bonds second tranche yields Rs.726 crore

The government has received subscriptions of Rs.726 crore for 2,790 kilograms of gold under the second tranche of sovereign gold bond scheme, an official statement said on Thursday.

"During the second tranche of Sovereign Gold Bond (SGB) Scheme from 18th January, 2016 to 22nd January, 2016, 3.16 lakh applications were received for a total subscription of 2,790 kilograms of gold amounting to Rs.726 crore by the banks," said a finance ministry statement.

The first tranche of the scheme launched in November had received a subscription for 915.95 kg of gold worth Rs.246 crore, the statement said.

"Second tranche of Gold Bonds: Outcome significantly better than first tranche. Scheme picking up," Economic Affairs Secretary Shaktikanta Das said in a tweet.

"The trend during the second tranche of SGB shows that the scheme is gradually picking up amongst the investors with increase in awareness and more clarity about its provisions," the finance ministry said.

The bonds for the second tranche of the scheme would be alloted on February 8.

The gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual ceiling of 500 grams per person.

Prime Minister Narendra Modi had last November launched the gold scheme aimed at reducing demand for the metal in physical form by encouraging people to buy gold in the demat or paper form.

India's gold imports increased to $26.45 billion during the April-December period of the current fiscal, as compared to the $25.85 billion worth imported in the same period of last year.