SGB issue price fixed at Rs 5,923 per gram, subscription to open on Sept 11

The Reserve Bank of India (RBI) on Friday said the issue price for the next tranche of Sovereign Gold Bond has been fixed at Rs 5,923 per gram and will open for subscription from September 11.

"The nominal value of the bond based on the simple average of closing price (for gold of 999 purity)... works out to Rs 5,923 per gram of gold," it said, while announcing the issue price of Sovereign Gold Bond Scheme 2023-24 Series II (second tranche).

The government, in consultation with the RBI, has decided to offer a discount of Rs 50 per gram less than the nominal value to investors applying online and making the payment against the application through digital mode.

For such investors, the issue price of gold bond will be Rs 5,873 per gram, it said.

The issue will be open from September 11-15, according to the statement.

The bonds will be sold through banks, Stock Holding Corporation of India Ltd (SHCIL), designated post offices, and recognised stock exchanges -- the NSE and the BSE.

The scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of domestic savings -- used for the purchase of gold -- into financial savings.

The price of the bond is fixed in Indian rupees on the basis of simple average closing price of gold of 999 purity, published by the India Bullion and Jewellers' Association Ltd for the last 3 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 will be 8 years, with an exit option after the fifth 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, and 20 kg for trusts and similar entities each fiscal.

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