Sovereign Gold Bond price fixed at Rs 6,263/gm; issues opens on Feb 12th

The Reserve Bank of India has announced the issue price of the upcoming tranche of Sovereign Gold Bond, set to open for subscription from Monday onwards. The price has been fixed at 6,263 rupees per gram.

Scheduled for subscription from February 12th to February 16th, 2024, the Sovereign Gold Bond Scheme 2023-24 - Series IV presents an opportunity for investors to diversify their portfolios.

In a move to incentivize digital transactions, the Government of India, in collaboration with the Reserve Bank, has decided to offer a discount of 50 rupees per gram less than the nominal value to investors applying online and making digital payments.

Consequently, for such investors, the issue price of Gold Bond will be 6,213 rupees.

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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.

The price of SGB is 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 investors are compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.

The maximum limit of subscription is 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year.

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.