Fifth tranche of sovereign gold bond scheme opens on 1 September
The tenure of the gold bond will be for a period of eight years with an exit option from the fifth year to be exercised on the interest payment dates
Mumbai: The government is set to issue the fifth tranche of the sovereign gold bond scheme on 1 September.
The tenure of the bond will be for a period of eight years with an exit option from the fifth year to be exercised on the interest payment dates.
The bonds are eligible for conversion into demat form, the government said in a statement.
The gold bonds will be sold through banks, Stock Holding Corporation of India Ltd (SHCIL), designated post offices and recognised stock exchanges such as National Stock Exchange of India Ltd and Bombay Stock Exchange, either directly or through agents, the statement said.
The investors will be compensated at a fixed rate of 2.75% per annum payable semi-annually on the initial value of investment. These bonds will be tradable on stock exchanges or negotiated dealing system-order matching (NDS-OM) within a fortnight of the issuance on a date as notified by the Reserve Bank of India (RBI).
The bonds will be eligible for statutory liquidity ratio (SLR) purposes for banks that sell them.
Commission for distribution of the bond shall be paid at the rate of 1% of the total subscription received by the receiving offices and receiving offices shall share at least 50% of the commission so received with the agents or sub agents for the business procured through them.
In all four tranches, the bonds have been able to raise up to Rs2,237 crore, corresponding to 7.85 million tonnes of gold. The government had managed to raise Rs919 crore through the fourth tranche, the finance ministry had said in a statement on 30 July.
The amount was mobilized through over 1.95 lakh applications, representing around 2.95 million tonnes of gold.
The gold bonds are part of the government’s gold monetization efforts launched in November last year, aimed to wean the public off physical gold. Import of physical gold had resulted in a burgeoning current account deficit for the country in fiscal year 2014.
According to World Bank estimates, around ₹ 20,000 crore worth of gold is lying with Indian households.
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