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Sovereign Gold Bond Series IV Subscription opens, priced at Rs 6,263 per gram

A discount of Rs 50 brings down the issue price for investors to Rs 6,213, confirmed RBI

Sovereign gold bond scheme
Sovereign gold bond scheme

New Delhi: The next tranche of the Sovereign Gold Bond, set to open for subscription from February 12th to 16th, 2024, has been priced at Rs 6,263 per gram, according to a statement from the Reserve Bank of India on Friday. This announcement aligns with the Sovereign Gold Bond Scheme 2023-24 - Series IV, with the nominal value of the bond pegged at Rs 6,263 per gram of gold.

In a move aimed at incentivizing digital transactions, the Government of India, in coordination with the Reserve Bank, has decided to extend a discount of Rs 50 per gram to investors who apply online and make payments digitally. This discount brings down the issue price for such investors to Rs 6,213, as confirmed by the RBI.

These bonds will be available for purchase through various channels including scheduled commercial banks, the Stock Holding Corporation of India Limited (SHCIL), designated post offices, and major stock exchanges like the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.

The pricing of the Sovereign Gold Bond is determined in Indian rupees based on the simple average of the closing price of gold of 999 purity, as published by the India Bullion and Jewellers Association Limited (IBJA) for the last three working days preceding the subscription period.

Investors stand to benefit from a fixed rate of interest of 2.50 per cent per annum, payable semi-annually on the nominal value of the bond. The maximum subscription limit is set at 4 kg for individuals, 4 kg for HUF, and 20 kg for trusts and similar entities per fiscal year.

With a tenor of eight years and the option of premature redemption after the fifth year, these bonds offer flexibility to investors. The Reserve Bank of India issues these bonds on behalf of the Government of India, and they can be utilized as collateral for loans.

KYC norms remain consistent with those required for the purchase of physical gold. Launched in November 2015, the sovereign gold bond scheme aims to reduce the demand for physical gold and channel a portion of domestic savings into financial instruments.

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