The Sovereign Gold Bond Scheme 2020-21 series VII opened for subscription on October 12, 2020 and closed on Friday (October 16, 2020). The issue price for the bonds (series VI), which were open for subscription from August 31, 2020 to September 4, 2020, was Rs Rs 5,117 per gram of gold.
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 RBI issued 10 tranches of Sovereign Gold Bonds (SGBs) for an aggregate amount of Rs 2,316.37 crore (6.13 tonnes) during 2019-20.
The issue price for the bond 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 for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs 50 per gram less for those who subscribe online and pay through digital mode, RBI said.
What is Sovereign Gold Bond Scheme?
Sovereign Gold Bond Scheme is a government security denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.
Who can buy Sovereign Gold Bond Scheme?
The bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
What will be the tenor of the Sovereign Gold Bond Scheme?
The tenor of the bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment dates.
How will the Sovereign Gold Bond Scheme be sold?
The bonds will be sold through scheduled commercial banks (except Small Finance Banks and Payment Banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
