Mumbai: The issue price for sovereign gold bonds, which open for subscription on Monday, has been fixed at Rs2,901 per gram of gold, the Reserve Bank of India (RBI) said on Friday.
The Sovereign Gold Bond Scheme 2017-18--Series I will be opened for subscription from 24 to 28 April, 2017. The bonds will be issued on 12 May.
The issue price of the bond is based on the simple average closing price (published by the India Bullion and Jewellers Association) for gold of 999 purity of the week preceding the subscription period. It works out to be Rs2,951 per gram.
However, the government, in consultation with the RBI, has decided to offer a discount of Rs50 per gram on the nominal value of the Sovereign Gold Bond. “Hence, the issue price of gold bond for this tranche has been fixed at Rs2,901 per gram of gold,” the RBI said in a notification.
The bonds would earn an interest of 2.75% per annum, payable every six months on initial investment. The tenor of the bond will be for a period of 8 years with exit option from fifth year to be exercised on the interest payment dates.
The minimum investment limit into these bonds is one gram of gold, while the maximum amount subscribed by an entity cannot be more than 500 grams per person per fiscal year. The bonds will be sold through banks, post offices, Stock Holding Corporation of India (SHCIL), and recognised stock exchanges—National Stock Exchange (NSE) and BSE.