Mumbai: The Reserve Bank of India (RBI) on Monday said the sovereign gold bonds issued last month will be eligible for trading on stock exchanges from Tuesday.

The Sovereign Gold Bond Scheme 2017-18 Series II was announced by the government of India on 6 July. Applications for the bonds were accepted from 10-14 July 2017 and issued on 28 July.

The government had launched the scheme in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings, used for purchase of gold, into financial savings.

“Sovereign Gold Bonds, issued on 28 July 2017, held in dematerialised form, shall be eligible for trading with effect from 8 August 2017 (Tuesday) on stock exchanges recognised by the government of India...," the RBI said in a statement.

The bonds were sold through banks, Stock Holding Corp. of India Ltd (SHCIL), designated post offices and recognised stock exchanges--the NSE and BSE.

Prior to the July series, the government had issued eight tranches of SGBs and mobilised Rs5,400 crore. Investors in these bonds have the option of holding them in physical or dematerialised form.