The gold bond scheme, issued by the RBI on behalf of the government, is restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.
The Reserve Bank of India or RBI will launch the Sovereign Gold Bond (SGB) Scheme 2022-23 – Series IV for subscriptions from March 6-10. The central bank said in a statement that the value of the subscription has been fixed at ₹5,611 per gram of gold. However, it will offer a discount of ₹50 per gram less than the nominal value to those investors who opt for a digital mode of payment.
“For such investors (opting digital), the issue price of Gold Bond will be ₹5,561- per gram of gold,” the statement read.
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In the statement dated March 3, the RBI clarified the subscription price, saying “The nominal value of the bond based on the simple average of closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three working days of the week preceding the subscription period, i.e. March 01, March 02, and March 03, 2023, works out to ₹5,611/.”
Key things to know about the scheme?
Scheme eligibility: Sovereign gold bonds are issued by the RBI on behalf of the government. On its eligibility, the RBI explains that these bonds are restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. These bonds are issued as Government of India Stock under the Government Securities Act, 2006.
Maximum limit: These bonds are denominated in multiples of grams of gold with a basic unit of one gram. While the minimum permissible limit of investment is one gram, RBI has clarified that “the maximum permissible limit of subscription shall be 4 Kg for individuals, 4 Kg for HUF and 20 Kg for trusts and similar entities.”
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Payment methods: For payment options, one can avail cash payment (up to a maximum of ₹20,000) or demand draft or cheque or electronic banking, as per the rules.
Joint holders and interest rates offered: For joint holders, the investment limit of 4 Kg will be applied to the first applicant only. While on the interest rates offered, the RBI says that “the investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.”
Collateral: RBI says these bonds can be used as collateral for loans. “The loan-to-value (LTV) ratio will be as applicable to any ordinary gold loan, mandated by the Reserve Bank from time to time.”
