Gold & Silver

Sovereign Gold Bond scheme 4th series: NSE asked to create awareness among investors

K R Srivats New Delhi | Updated on January 13, 2018 Published on February 26, 2017


Praising National Stock Exchange (NSE) for its efforts so far for the Sovereign Gold Bond scheme, the Finance Ministry has written to this bourse urging it to actively create awareness among investors even for the upcoming fourth series.

The fourth series of gold bond scheme will open on Monday and close on March 3. The bonds will be issued on March 17.

Till date, in respect of 2016-17, NSE has been ranked second among the top receiving offices.The other entities that had been allowed to perform the role of receiving offices include banks, SHCIL, BSE and designated post offices.

Economic Affairs Secretary Shaktikanta Das had few days ago written to the NSE Managing Director & CEO and urged the bourse to advice the respective depositories to begin full-fledged efforts for promoting the gold bonds scheme.

NSE has been asked to fetch a major share in the overall subscription even better than the previous tranches, sources said.

For 2016-17, the Centre hopes to mobilise about Rs 3,800 crore through gold bonds scheme. In 2015-16, the Government had raised Rs 1,318 crore through three tranches.

In the six tranches of sovereign gold bonds issued till date, a total of 14,071 kilograms of gold amounting to Rs 4,127 crore had been subscribed.

Post the 2015-16 Budget announcement, Sovereign Gold Bonds (SGB) scheme was launched as an alternative to physical gold in November 2015.

The aim of SGBs is to reduce demand including through imports, for physical gold, and in the process reduce India's current account deficit.

Under the fourth series, SGBs carry an annual interest of 2.50 percent payable semi-annually. The tenure of the bond is 8 years with exit options at the end of 5th, 6th and 7th year. Minimum subscription will be 1 gram.

The issue price of the gold bonds will be Rs 50 per gram less than the nominal value. Bonds, which can be used as collateral for loans, will be traded on the exchange thus providing investors with an opportunity to exit early.

Published on February 26, 2017

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