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Sovereign Gold Bond Scheme Subscription Starts from Monday: Price, Discount, How to Buy

The Sovereign Gold Bonds will be issued in four tranches from October 2021 to March 2022, the RBI has said

The Sovereign Gold Bonds will be issued in four tranches from October 2021 to March 2022, the RBI has said

Sovereign Gold Bond Scheme Subscription 2021-2022, Series 7, is set to start from Monday, October 25. The window will be open till October 29, the RBI has said

Sovereign Gold Bond Scheme Subscription 2021-2022, Series 7, is set to start from Monday, October 25, the Reserve Bank of India has announced. The subscription window will be open between October 25 to October 29, that is from Monday to Friday next week, the central bank said in a press release on Thursday. 

The Sovereign Gold Bonds will be issued in four tranches from October 2021 to March 2022, the RBI has said in its press release. The rate of interest will be applied at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.

What is the issuance price of these Bonds?

The Finance Ministry on Saturday fixed the issue price for Sovereign Gold Bonds at Rs 4,765 per gram of gold. The Bond will be fixed in Indian Rupees on the basis of a simple average of the closing price of gold of 999 purity, the Reserve Bank has said. India Bullion and Jewellers Association Limited will be publishing the issue price of the Bond for the last three working days of the week preceding the subscription period.

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People who subscribe online and pay in a digital mode will have to pay Rs 50 less per gram of gold, the bank said, apparently in a move to boost the vision of ‘Digital India’.

Similarly, the redemption price will be in Indian Rupees based on the average closing price of gold of 999 purity, of the previous three working days published by IBJA Ltd.

I want to buy one of these Bonds. Am I eligible?

Any person who is a resident of India as defined under Foreign Exchange Management Act, 1999 is eligible to invest in Sovereign Gold Bonds. Members of Hindu undivided families, trusts, universities and charitable institutions are also eligible to invest in this scheme. Apart from this, minors are also eligible to invest, given that his or her application form is submitted by a guardian.

The Gold Bonds will be issued as Government of India Stock under GS Act, 2006.

The investors will be issued a Holding Certificate after the process is completed. The Bonds are eligible for conversion into demat form, says the press release by RBI.

How can I buy Sovereign Gold Bonds?

An individual can buy Sovereign Gold Bonds through various ways, including digitally. To opt for the digital method, one can apply via the websites of the listed scheduled commercial banks. Additionally, one will get a discount of Rs 50 per gram if he or she chooses to apply online. 

For cash payments, an individual can pay up to a maximum of Rs 20,000 while buying these bonds. One can also choose to pay demand draft or cheque or electronic banking.

Know more about  Sovereign Gold Bonds

Sovereign Gold Bonds, the RBI has said, can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loans mandated by the Reserve Bank from time to time.

Each individual can buy up to four kilograms of these government securities, denominated in grams of gold. For trusts and other organisations, the limit is set at 20 kilograms. 

The tenure of the Bond is eight years. Both interest and redemption proceeds will be credited to the bank account furnished by the customer at the time of buying the bond, the RBI has said.

Sovereign Gold Bonds can be sold through Commercial banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Ltd. (CCIL), designated post officesand recognised stock exchanges like the Bombay Stock Exchange and the National Stock Exchange.

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first published:October 23, 2021, 16:15 IST