Govt to issue sovereign gold bonds in six tranches in H1FY21
The bonds, offering an annual interest rate of 2.5%, will be issued from April 2020 to September 2020, says Finance Ministry
The bonds will have a tenor of eight years but investors will have the option to exit after the fifth year
New Delhi: The government has initiated the process of borrowing with the launch of sovereign gold bonds in consultation with the Reserve Bank of India in the current financial.
As per a press statement issued by the Finance Ministry, the sovereign gold bonds will be denominated in multiples of grams of gold with a basic unit of 1 gram. The tenor of the bond will be for a period of 8 years with exit option after 5 years to be exercised on the interest payment dates.
Subscribers will be allowed minimum investment of 1 gm (value of bond) of gold while maximum level of subscription will be 4 kg of gold for individuals and HUF while 20 kg for trusts and similar entities per fiscal.
The price of the bond will be fixed in Indian rupees on the basis of simple average closing price of gold of .999 purity for the last 3 working days of the week preceding the subscription period. Those taking subscription through online route or other digital mode will get ₹50 discounts on 1 gm worth of of sovereign gold bond. The redemption of the bond will also be in rupees based on three days average price of gold preceding the redemption request.
The bond will provide SLR cover to bank subscribers. It will be sold through banks, post offices, exchanges and through agents.
India's gold imports have plunged more than 73% year-on-year in March as record prices and the lockdown related to coronavirus squeezed retail demand
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.