The Sovereign Gold Bond Scheme 2023-24 Series 3 opened for subscription on Monday, with the issue price fixed at ₹6,199 per gram for this tranche. The gold bond will be open for subscription till December 22.
The sovereign gold bonds (SGB) 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 SGBs will be issued as Government of India Stock under the Government Securities Act, 2006. The investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form,” the RBI said in a statement on its website.
The SGB Series I was open for subscription during June 19-23 and Series II during September 11-15. The Series IV is scheduled for February 12-16.
Sovereign gold bonds are government securities 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.
It was launched in 2015 with the aim of reducing the demand for physical gold and shift a part of the domestic savings — used for the purchase of gold — into financial savings.
According to the ministry of finance, the tenor of the sovereign gold bands will be eight years with an option of premature redemption after the fifth year to be exercised on the date on which interest is payable.
The Centre has decided to offer a discount of ₹50 per gram less than the nominal value to those investors applying online and making the payment through digital mode.
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 shall be 4 kg for individuals, 4 kg for Hindu Undivided Families (HUF) and 20 kg for trusts and similar entities per fiscal year.
Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to individuals and other entities.