The Government of India (GoI) in consultation with the Reserve Bank of India (RBI), has announced the Sovereign Gold Bond (SGB) Scheme 2021-22. The SGBs will be issued in 4 tranches of Series VII, VIII, IX and X from October 2021 to March 2022.
- Under the SGB scheme, there will be a distinct series for every tranche.
SGB Scheme 2021-22 Series VII – Issue Price:
i.The Ministry of Finance has fixed the nominal value for SGB at Rs 4,761 per gram of gold.
ii.Discount: GoI has decided to offer a discount of Rs 50 per gram on the nominal value to those investors who are applying online and making payments through digital mode.
iii.Thus after discount the issue price of Gold Bond will be Rs 4,711 per gram of gold.
At what price the Gold bonds are sold?
The Gold bonds will be sold at the nominal value, which will be fixed on the basis of a simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewelers Association Limited, for the last 3 business days of the week preceding the subscription period. Click here to know more
-R-GMS: Govt Reduced Deposit Amount to 10 gram of Gold
In February 2021, the Union government made certain amendments to the Gold Monetisation Scheme (GMS) and announced a Revamped GMS (R-GMS). The minimum deposit amount under R-GMS was reduced to just 10 gram of raw gold (bars, coins, jewellery excluding stones and other metals) from 30 gram.
- Objective: To unlock an estimated 22,000 tonnes of idle gold lying in Indian households.
Key Points about R-GMS:
i.Dematerialisation of MTGD and LTGD Deposit certificates: In the 1st stage, the issue of Medium-Term Gold Deposit (MTGD) and Long-Term Gold Deposit (LTGD) certificates by banks were moved to a secure digital platform, to be developed by the State Bank of India (SBI) on behalf of the Government.
ii.Banks will also dematerialise Short-Term Gold Deposit (STGD) certificates issued by them and SBI was set to designate a regulated securities depository to hold the certificates in a digital Demat format.
iii.Inclusion: Jewellers were included under R-GMS and were encouraged to set up BIS-approved collection and purity testing centres (CPTCs) under the scheme.
iv.There is no maximum limit set for deposits under R-GMS and the GMS security will be tradable in the market.
About Sovereign Gold Bond (SGB):
i.They are the government securities denominated in grams of gold and they are issued by the RBI on behalf of the government.
ii.To reduce the demand for physical gold, the sovereign gold bond scheme was launched in November 2015.
iii.To buy the gold bonds, the investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.