Opening of the Sovereign Gold Bond program: issue price, other details

The issue price of the next tranche of the Sovereign Gold Bond Scheme 2021-22, which will open for subscription for five days from Monday, has been set at Rs 4,786 per gram, the Reserve Bank of India announced on Friday ( RBI).

Sovereign Gold Bond Scheme 2021-22 – Series XI will be open for five days for subscription from January 10 to January 14, 2022. RBI said the face value of the bond is Rs 4,791 per gram of gold. The settlement date will be January 18, 2021.

“In terms of Indian Government Notification No. 4 (5) -B (W&M) / 2021 dated October 21, 2021, the 2021-22 Gold Sovereign Bonds (Series IX) will be open for subscription during the period from January 10 to 14, 2022 with settlement date January 18, 2022 ”, we read in the official press release from the Ministry of Finance.

The government, in consultation with the RBI, has decided to allow a rebate of Rs 50 per gram on the issue price to investors who apply online and payment is done digitally.

For these investors, the issue price of the gold bond will be 4,741 rupees per gram of gold. The issue price for the previous series was Rs 4,761 per gram of gold.

The bonds will be sold through banks (except small financial banks and payment banks), Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognized stock exchanges, namely the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.

The Sovereign Gold Bond Scheme was launched in November 2015. The objective of this program is to reduce the demand for physical gold and to transfer part of the national savings used for the purchase of gold to financial savings .

The bond price is set in Indian rupees based on the simple average of the closing prices of 999 purity gold, published by the India Bullion and Jewelers Association Limited for the last 3 working days of the previous week. the subscription period.

The bonds will be denominated in multiples of gram (s) of gold with a base unit of 1 gram. The term of the obligation will be eight years with an exit option after the 5th year to be exercised at the next interest payment dates.

The minimum authorized investment is 1 gram of gold. The maximum subscription limit is 4 kg for individuals, 4 kg for HUFs and 20 kg for trusts and similar entities by fiscal (April-March).

Know-your-customer (KYC) standards will be the same as for purchasing physical gold.

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Richard L. Militello