The government will issue a tranche of sovereign gold bonds (SGB) this month, and another in February.
The subscription date for Series III 2023-24 is December 18-22, 2023, while for Series IV is scheduled for February 12-16, a statement from the Ministry of Finance said on Friday.
Series I was open for subscription from June 19 to 23 and Series II from September 11 to 15.
SGBs will be sold through Scheduled Commercial Banks (except Small Finance Banks, Payment Banks and Regional Rural Banks), Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices, National Stock Exchange of India Limited and Bombay Stock Exchange Limited.
The price of SGB will be fixed in Indian Rupees based on the simple average of the closing price of gold of 999 purity, published by the India Bullion and Jewelers Association Limited (IBJA) for the last three working days of the week preceding the subscription period.
The issue price of SGBs will be lower by Rs 50 per gram for investors who subscribe online and pay through digital mode, the ministry said.
“Investors will be remunerated at a fixed rate of 2.50 percent per annum, payable semi-annually on the nominal value,” the statement added.
The maximum subscription limit is 4 kg for individuals, 4 kg for HUFs and 20 kg for trusts and similar entities per financial year.
The Finance Ministry said the tenure of the SGB would be eight years, with an option for early repayment after the fifth year, to be exercised on the date interest is payable.
The Reserve Bank of India issues the bonds on behalf of the Indian government.
Bonds can be used as collateral for loans.
Know Your Customer (KYC) standards will be the same as those for purchasing physical gold.
The sovereign gold bond program was launched in November 2015 with the aim of reducing demand for physical gold and shifting part of domestic savings – used for purchasing gold – into financial savings .