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Government launched Sovereign Gold Bond Scheme (2017 -18) – Series-III

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Government of India has decided to issue Sovereign Gold Bonds 2017-18 – Series-III. These bonds will be issued by Reserve Bank India (RBI) on behalf of the Government of India.

Details about Sovereign Gold Bonds Scheme 2017-18–Series I:

Subscription Date: October 9, 2017 to December 27, 2017

Denomination: 1 gm

Issue Price: Simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Limited for the last 3 business days of the week preceding the subscription period. Discount of Rs. 50 per gm, for those who subscribe online and pay through digital mode.

Tenure: 8 years

Interest Rate: 2.50% per annum, payable every 6 months.

Exit Option: From 5th year onwards, to be exercised on interest payment dates

Minimum Size: 1 gm

Maximum Limit:4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.

Sold By: Banks, Post Offices, Stock Holding Corporation of India (SHCIL), National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)

About Sovereign Gold Bonds Scheme:

goldThe Sovereign Gold Bonds Scheme was first announced in Union Budget 2015-16. Consequentially, the first tranche was issued in November 2015. Till date, seven tranches of SGBs have been issued and as a result 6,410 kg of gold has been mobilised.

  • There were two objectives behind launching Sovereign Gold Bonds. Firstly to reduce the demand of physical gold and thereby reduce the import bill of the country, secondly, the funds deployed in Gold Bonds can be used for developmental projects in the country.

Benefits of Sovereign Gold Bonds:

So far, in every tranche the issue price was set at a discount of Rs. 50/gm of nominal value of gold, which itself is a benefit for individual buyers.

  • The investors get stipulated interest on the bonds and can also get the benefit if the price of gold appreciates in future.
  • These bonds are highly liquid, just as physical gold. These bonds can even be placed as collaterals while seeking loan.
  • Buying Gold bonds eliminates the need for conducting quality check, which is required while buying physical gold.
  • For buyers of physical gold, storage and security issues are always a concern. There are no such concerns for gold bonds as they are issued in paper form and can even be dematerialised.