The Reserve Bank of India said on Friday that the next tranche of Sovereign Gold Bond will be open for subscription for a period of five days from Monday at the issue price of Rs 6,263 per gram. 

The regulator informed that the Sovereign Gold Bond Scheme 2023-24 – Series IV will be available for subscription from February 12 to 16, 2024, via an official statement. “The nominal value of the bond … works out to Rs 6,263 per gram of gold,” the RBI said.

The central bank stated that the Indian government, in consultation with the bank, has decided to provide a discount of Rs 50 per gram to investors applying for the bond online and opting to make the payment for the application digitally. The effective issue price for such investors will be Rs 6,213 per gram. Other investors can opt for paying for the bonds via cash (a maximum limit of Rs 20,000), demand draft, or cheque. 

The regulator informed that the SGB would be sold via scheduled commercial banks, excluding small finance banks, payment banks, and regional rural banks, the Stock Holding Corporation of India Limited (SHCIL), the NSE, BSE, Clearing Corporation of India Limited (CCIL), and designated post offices.

Notably, the pricing of the gold bond is decided in Indian currency based on the simple average of the closing price of gold of 999 purity. The closing price is issued by the India Bullion and Jewellers Association Limited (IBJA), for the last three working days of the week before the subscription period. 

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Eligibility and Limits

Only resident individuals, Hindu Undivided Family (HUF), trusts, universities, and charitable organisations are eligible to buy the SGB. the maximum subscription limit for the bond is set at 4 kg each for individuals and HUF, while trusts and other entities are permitted to buy a maximum of 20 kg, per fiscal year. The annual limit also includes the bonds subscribed under different tranches, and those bought from the secondary market, during the reviewing fiscal year. 

The investors are given compensation for the bonds at a fixed rate of 2.50 per cent per annum, paid on a semi-annual basis on the nominal value. The gold bonds have a tenor of eight years and allow premature redemption after the 5th year, with the customers permitted to exercise the redemption on the date on which interest is payable. 

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