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Sovereign gold bond scheme opens today: All you need to know

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

January 10, 2022 / 10:07 AM IST

The ninth tranche of Sovereign Gold Bond Scheme (SGB) 2021-22 will open for subscription on January 10 for five days till January 14, 2022. The Reserve Bank of India issues these bonds on behalf of the Union government. The issue price has been fixed at Rs 4,786 per gram.

Here's all you need to know about the scheme:

Nominal value and discount

While the issue price or the nominal value has been fixed at Rs 4,786 per gram of gold, the RBI will offer a discount of Rs 50 per gram less than the nominal value to those investors applying online and the payment against the application is made through digital mode. For such investors, the issue price of gold bond will be Rs 4,736 per gram of gold.

Pricing mechanism

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Price of bond 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 for the last three working days of the week preceding the subscription period.

Lock-in

The bonds are denominated in multiples of gram(s) of gold with a basic unit of one gram. The tenor of the bond will be for a period of 8 years with exit option after 5th year to be exercised on the next interest payment dates.

Minimum and maximum limit

Minimum permissible investment is one gram of gold. The maximum limit of subscription is 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal (April-March).

How to buy

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

KYC

The know-your-customer (KYC) norms will be the same as that for purchase of physical gold. The 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.
Moneycontrol News
first published: Jan 10, 2022 10:06 am

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