The third tranche of the Sovereign Gold Bond (SGB) scheme which opened from 8th March, 2016 to 14th March, 2016, as per initial figures, more than 64,000 applications have been received for a total subscription of 1128 Kilograms of gold amounting to Rs. 329 crore. The actual figure may vary as comprehensive information from all the authorized receiving agencies is under compilation. These Bonds will be issued on March 29, 2016. The top receiving agencies in terms of subscription amount are SBI, Bank of India, Indian Bank, ICICI Bank, Punjab and Sind Bank, HDFC Bank, Canara Bank, Andhra Bank, PNB, Union Bank of India and Central Bank of India.
The trend during the Third Tranche of SGB shows that the scheme is gradually picking-up amongst the investors with increase in awareness and more clarity about the provisions of the scheme.
Incidentally, during the First Tranche of SGB issued in November 2015, 62169 applications were accepted for a total subscription of 915.953 Kilograms of gold amounting to Rs 246.20 crore by the Banks and Post Offices. In the Second Tranche of SGB from 18th January, 2016 to 22nd January, 2016, approximately 3.16 lakh applications were accepted for a total subscription of 2872.3 Kilograms of gold amounting to Rs 746.80 Cr crore by the Banks.
Earlier, the Government of India had launched the Sovereign Gold Bond (SGB) Scheme on 5th November, 2015. The objective of the scheme is to reduce the demand for physical gold and shift a part of the domestic savings used for purchase of gold, into financial savings.
Sovereign Gold Bonds are issued on behalf of Government of India in tranches by RBI, from time to time, on payment of the required amount in rupees. The Bonds are denominated in grams of gold and are restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions. Minimum permissible investment is two grams of gold, value of which is to be paid in rupees. The maximum amount which could be subscribed is 500 grams per person per financial year. Government has fixed the rate of interest on gold bonds for the year 2015-16 as 2.75 % per annum, payable on half yearly basis. The tenor of the Bond is for a period of 8 years with exit option from 5th year onwards. On maturity, the investor will get the equivalent rupee value of the quantum of gold invested at the then prevailing price of gold. Exemption, from capital gains is available at redemption.