Govt to issue sovereign gold bonds tranche in December and February

The government will issue a tranche of sovereign gold bonds (SGBs) this month, and one more in February.

The date for subscription for 2023-24 Series III is December 18-22, 2023, while for Series IV is scheduled for February 12-16, a finance ministry statement said Friday.

The Series I was open for subscription during June 19-23 and Series II during September 11-15.

The SGBs will be sold through scheduled commercial banks (except small finance banks, payment banks and regional rural banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

Price of SGB will be fixed in Indian rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days of the week preceding the subscription period.

The issue price of the SGBs will be less by Rs 50 per gram for the investors who subscribe online and pay through digital mode, the ministry said.

"The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value," it added.

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 year.

The finance ministry said the tenor of the SGB will be eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.

The Reserve Bank of India issues the bonds on behalf of the Government of India.

The bonds can be used as collateral for loans.

Know Your Customer (KYC) norms will be the same as that for the purchase of physical gold.

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