The banks will “shortly” issue the second tranche of sovereign gold bonds, Finance Ministry said today.

“Sovereign Gold Bonds: Next Issue opens shortly. Banks will issue these bonds,” Economic Affairs Secretary Shaktikanta Das tweeted.

Reserve Bank had launched the first tranche of gold bond scheme in November. The subscription was for 915.95 kg amounting to Rs 246 crore.

Prime Minister Narendra Modi had on November 5 launched gold schemes to wean away investors away from holding physical gold.

India imports about 1,000 tonnes of gold every year and the precious metal is the second highest constituent of the imports bill after crude.

The scheme is aimed at reducing the demand for gold in physical form by encouraging people to buy the commodity in demat or paper form.

The gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of five years to seven years with a rate of interest to be calculated on the value of the metal at the time of investment.

The Gold Bond scheme will have an annual cap of 500 grams per person and such bonds would be issued for a period of five to seven years.