India: Govt to launch third tranche of gold bond scheme on March 8

Mumbai-India (Mar 5)  The Narendra Modi government will launch the third tranche of the gold bond scheme on March 8. The previous two rounds had got a good response, enabling the government to raise nearly Rs 1,050 crore.

"The Third Tranche of the Sovereign Gold Bonds will be kept open from 8th March 2016 (Tuesday) to 14th March, 2016 (Monday). The Bonds will be issued on 29th March, 2016," said a finance ministry statement.

The government had received 3.16 lakh applications for 2,790 kg of gold valued at about Rs 726 crore in the second tranche under the sovereign gold bond (SGB) scheme from Jan. 18 to 22, 2016.

The gold bond scheme, aimed at reducing the physical demand for the metal, was the first-of-its-kind launched by the Modi government on Nov. 5 last year.

 India imports about 800-1,000 tonnes of gold annually and is the world's second-largest consumer of the yellow metal after China.

The bonds will be available in both demat and physical forms. The maturity period for the bonds will be eight years, with the option to exit from the fifth year. The bonds will be made available through designated banks and post offices.

Investors will be paid a fixed rate of interest of 2.75% per annum on their investment. The interest will be paid half-yearly and bonds can be furnished as collaterals to obtain loans.