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RBI fixes gold bonds issue price at Rs 2,684 per gram

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Reserve Bank has fixed the public issue price at Rs.2,684 per gram for the sovereign gold bonds for which applications will be accepted from November 5 to 20.

RBI fixes gold bonds issue price at Rs 2,684 per gram

Gold schemes :

1.Gold monetisation    2.Gold bonds

Gold monetisation :

Gold Monetisation Scheme, which would enable depositors, such as households and jewelers, to open metal deposits with banks and place their gold holdings in them. You can also borrow money using these accounts.

Gold bonds  :

The gold bond will work like a regular coupon bearing bond that the government issues to borrow money for various purposes. The government receives money from investors, who invest in the bond, and pays a fixed periodic interest known as coupon on it.

Aim :

To providing an alternative to buying physical gold, the gold bond scheme will offer investors an interest rate of 2.75 per cent

  • Minimum limit : 2 grams
  • Maximum limit : 500 grams

Highlights of gold bonds

The rate has been fixed on the basis of simple average of closing price for gold of 999 purity of the previous week (October 26-30, 2015) published by the India Bullion and Jewellers Association Ltd (IBJA), the RBI added.

  • The bonds, which will be sold through banks and designated post offices, would be issued on November 26.
  • This is the first tranche of the gold bond scheme and subsequent tranches would be notified later.
  • The tenor of the bond will be for a period of eight years with exit option from 5th year to be exercised on the interest payment dates, the statement said.
  • The interest earned on gold bonds would be taxable, and capital gains tax shall be levied as in case of physical gold.
  • The bonds can be bought by resident Indian entities including individuals, HUFs, trusts, universities and charitable institutions.