First tranche of RBI’s 2022-23 sovereign gold bond opens for subscription on June 20
Bombay:
The first tranche of Sovereign Gold Bond (SGB) for 2022-23 will be open for five days from June 20, the Reserve Bank of India said on Thursday.
The RBI further said that the second tranche (2022-23 Series II) will be available for subscription during August 22-26, 2022.
The central bank issues the bonds on behalf of the Government of India, and these bonds may only be sold to residents, Hindu Undivided Families (HUFs), trusts, universities and charities.
“The term of the SGB is for an eight-year period with an option to prepay after the 5th year, exercisable on the date on which interest is payable,” the RBI said, adding that the minimum allowed investment will be one gram of gold.
In 2021-2022, SGBs were issued in 10 tranches for a total amount of Rs 12,991 crore (27 tons).
The maximum enrollment limit is 4kg for individuals, 4kg for HUFs and 20kg for trusts and similar entities per fiscal year.
The RBI further said that the price of SGB will be determined in rupees based on a simple average of the closing price of 999 purity gold published by the India Bullion and Jewelers Association Limited (IBJA) for the last three business days of the week prior to the subscription period.
The issue price of the SGBs will be Rs 50 per gram lower for the investors who subscribe online and pay via digital mode.
“Investors will be compensated at a fixed rate of 2.5 percent per annum, payable semi-annually at face value,” the central bank said.
The SGBs are sold through banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), post offices and the two stock exchanges (NSE and BSE).
The government gold bond system was launched in November 2015 with the aim of reducing the demand for physical gold and converting some of the domestic savings used to purchase gold into financial savings.
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