BackRBI fixes gold bonds issue price at `2,600 per gram
RBI's price was marginally higher than the prevailing price of bullion in the market on Friday
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Mumbai: The Reserve Bank of India (RBI) has fixed the issue price of gold for sovereign gold bonds at ₹ 2,600 per gram, the central bank said in a release on Friday. The bonds go on sale between 18-22 January.
“The rate has been fixed on the basis of simple average of closing price for gold of 999 purity of the previous week (11-15 January) published by the India Bullion and Jewellers Association Ltd," RBI said.
RBI’s price was marginally higher than the prevailing price of bullion in the market on Friday. MCX spot gold closed at ₹ 2,557 per gram on Friday, unchanged from the previous session.
The bonds will be denominated in multiples of grams of gold with a basic unit of one gram. These bonds will be sold through banks, the Stock Holding Corp. of India Ltd and designated post offices.
This will be the second tranche of the government’s gold bond scheme that was launched in November last year. The first tranche of sovereign gold bonds became available for purchase between 5-20 November.
On 1 December, RBI announced that the scheme was able to attract deposits worth ₹ 246 crore.
During the sale of the first tranche, the top 10 receiving offices in terms of subscription amount were HDFC Bank Ltd, ICICI Bank Ltd, Yes Bank Ltd, Allahabad Bank, Bank of India, Andhra Bank, Karur Vysya Bank, DCB Bank, State Bank of India and Federal Bank Ltd, RBI said.
At that time, bankers had said that the response to the scheme was tepid due to the price of gold fixed for the bond issue being higher than that of physical gold in the market. In the previous tranche, RBI had fixed the issue price at ₹ 2,684 per gram of gold.
According to a World Bank estimate, about 20,000 tonnes of gold is lying in Indian households. Between 2011-13, Indian household savings shifted from bank deposits and other financial products to physical assets like gold and real estate owing to double-digit inflation. The rise in demand for gold, already an integral part of Indian household savings, resulted in imports surging and the current account deficit widening sharply for the country.
The sovereign gold bonds scheme was launched in an effort to reduce demand for physical gold by providing an alternative investment instrument linked to gold.
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