Sovereign gold bond sale on 5-20 Nov: RBI

Mumbai-India (Nov 3)  The Reserve Bank of India (RBI) on Tuesday said the sovereign gold bond will be open for subscription between 5-20 November.

The bond will be issued at an annual interest rate of 2.75% on 26 November, a government announcement had said on 30 October.

The issue price for the sovereign gold bond in this tranche has been fixed at Rs.2,684 per gram of gold, RBI said in a notification on its website.

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

The bonds will be issued by RBI on behalf of the government and will be available for sale at banks and post offices. They will be part of the government’s market borrowing programme.

These bonds are part of the government’s ambitious programme to reduce the physical demand for gold and help reduce the import bill as India’s gold imports range between 800-1,000 tonnes a year.

According to details in the 30 October statement, the bonds’ tenor will be of eight years, with an exit option from the fifth year. The bonds will be denominated with the basic unit of one gram, and the minimum investment limit per person will be 2 grams and the maximum 500 grams.

Source: LiveMint-in