Sovereign gold bond 2022-23: Series IV to open tomorrow. Check issue price, other details
3 min read . Updated: 05 Mar 2023, 12:24 PM IST
Premium- The tenure of the SGB will be for eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.
- The minimum permissible investment will be One gram of gold, while the maximum limit is 4 kg.
The Reserve Bank of India (RBI) will launch the Sovereign Gold Bond Scheme 2022-23 - Series IV on March 6th for a subscription. The issue will be available till March 10. The central bank has fixed an issue price of ₹5,611 per gram of gold, however, it also offers a discount of ₹50 to those investors who bid through digital mode.
In a statement on March 3rd, RBI said, "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 per gram of gold."
However, RBI added that in consultation with the government, it has decided to offer a discount of ₹50 per gram less than the nominal value to those investors applying online and making the payment against the application through digital mode.
For investors who subscribe SGBs online, the issue price of Gold Bond will work out to ₹5,561 per gram of gold.
Here are key points to know about SGB 2022-23 series as per RBI's guidelines:
- RBI issues sovereign gold bonds on behalf of the Indian government.
- SGBs will be denominated in multiples of gram(s) of gold with a basic unit of One gram.
- The tenure of the SGB will be for eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable.
- The minimum permissible investment will be One gram of gold.
- While the maximum limit of subscription shall be 4 Kg for individuals, 4 Kg for HUF, and 20 Kg for trusts and similar entities per fiscal year (April-March), as notified by the Government from time to time. A self-declaration to this effect will be obtained from the investors at the time of making an application for a subscription. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the secondary market, during the fiscal year.
- If there is a joint holding, the investment limit of 4 Kg will be applied to the first applicant only.
- The payment for the SGBs will be through cash payment (up to a maximum of ₹20,000) or demand draft or cheque or electronic banking.
- The investors will be issued a Certificate of Holding for the same. The SGBs will be eligible for conversion into demat form.
- Investors will be compensated at a fixed rate of 2.50% per annum payable semi-annually on the nominal value.
- SGBs 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.
- Know-your-customer (KYC) norms will be the same as that for the purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN, or TAN /Passport will be required. Every application must be accompanied by the ‘PAN Number’ issued by the Income Tax Department to individuals and other entities.
- SGBs are eligible for trading.