Posts Tagged ‘Sovereign Gold Bond Scheme 2018’

Sovereign Gold Bond Scheme 2018-19 (Series II) – Issue Price

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Ministry of Finance

Sovereign Gold Bond Scheme 2018-19 (Series II) – Issue Price

12 OCT 2018

Government of India, in consultation with the Reserve Bank of India, Sovereign Gold Bonds 2018-19 (Series II) will be opened for the period October 15-19, 2018. The issue price of the Bond during this subscription period i.e. October 15-19, 2018, shall be Rs. 3,146 (Rupees Three Thousand One Hundred Forty Six only) – per gram with Settlement on October 23, 2018, as also published by RBI in their Press Release dated October 12, 2018.

Government of India in consultation with the Reserve Bank of India, has decided to allow discount of Rs.50 (Rupees Fifty) per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors the issue price of Gold Bond will be Rs. 3,096 (Rupees Three Thousand Ninety  Six only) per gram of gold.

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Sovereign Gold Bond Scheme 2018 -19

Ministry of Finance

Sovereign Gold Bond Scheme 2018 -19

08 OCT 2018

Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds-2018-19. The Sovereign Gold Bonds will be issued every month from October 2018 to February 2019 as per the calendar specified below:

S. No. Tranche Period of Subscription Date of Issuance
1 2018-19 Series II October 15-19, 2018 October 23, 2018
2 2018-19 Series III November 05-09, 2018 November 13, 2018
3 2018-19 Series IV December 24-28, 2018 January 01, 2019
4 2018-19 Series V January 14 – 18, 2019 January 22, 2019
5 2018-19 Series VI February 04-08, 2019 February 12, 2019

The Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The features of the Bond are given below:

Sl. No. Item Details
1 Product name Sovereign Gold Bond 2018-19.
2 Issuance To be issued by Reserve Bank India on behalf of the Government of India.
3 Eligibility The Bonds will be restricted for sale to resident entities including individuals, HUFs, Trusts, Universities and Charitable Institutions.
4 Denomination The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.
5 Tenor The tenor of the Bond will be for a period of 8 years with exit option in 5th, 6th year and 7th year to be exercised on the interest payment dates.
6 Minimum size Minimum permissible investment will be 1 gram of gold.
7 Maximum limit The maximum limit of subscribed shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.
8 Joint holder In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.
9 Issue price Price of Bond will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be ’50 per gram less for those who subscribe online and pay through digital mode.
10 Payment option Payment for the Bonds will be through cash payment (up to a maximum of ‘20,000) or demand draft or cheque or electronic banking.
11 Issuance form The Gold Bonds will be issued as Government of India Stock under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.
12 Redemption price The redemption price will be in Indian Rupees based on previous 3 working days simple average of closing price of gold of 999 purity published by IBJA.
13 Sales channel Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices (as may be notified) and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.
14 Interest rate The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.
15 Collateral Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. The lien on the bonds shall be marked by the depositary by the authorized banks. The loan against SGBs would be subject to decision of the lending bank/institution and cannot be inferred as a matter of right by the SGB holder.
16 KYC documentation Know-your-customer (KYC) norms will be the same as that for 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 the investor(s).
17 Tax treatment The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an indidual has been exempted. The indexation benefits will be provided to long term capital gains arising to any person on transfer of bond.
18 Tradability Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date, as notified by the RBI.
19 SLR eligibility Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.
20 Commission Commission for distribution of the bond shall be paid at the rate Rupee one per hundred Rupees the total subscription received by the receiving offices and receiving offices shall share at least paise 50 per hundred Rupees of the commission so received with the agents or sub agents for the business procured through them.

Be the first to comment - What do you think?  Posted by admin - October 8, 2018 at 9:13 pm

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