Sovereign Gold Bond scheme tranche 7 opens

New Delhi, Feb 27 (IANS) The seventh tranche of the Sovereign Gold Bond (SGB) scheme opened on Monday and will close on March 3.

“Online bidding platform for Sovereign Gold Bond Scheme 2016 -17 – Series 4 (Tranche 7) is open for subscription from Monday, February 27 to Friday, March 03, 2017 for trading members to subscribe to the issue for their clients,” a Bombay Stock Exchange (BSE) statement said.

“Six tranches of the bonds have been issued so far. In the light of reasonable success of the issuances, Government of India has now decided to issue the seventh tranche of the Sovereign Gold Bond,” it added.

The bonds will be sold through banks, Stock Holding Corporation of India Limited, designated post offices, the National Stock Exchange (NSE) and BSE.

The bonds will be issued on March 17.

Payments for the bonds is by cash (up to a maximum of Rs 20,000) or demand draft or cheque or electronic banking.

The bonds’ tenure will be eight years with an exit option from the fifth year to be exercised on the interest payment dates.

Minimum permissible investment will be in one gram of gold. The maximum amount subscribed by an entity will not be more than 500 gm per person per fiscal.

The investors will be compensated at a fixed rate of 2.50 per cent per annum payable semi-annually on the nominal value.

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

The central government launched the SGB scheme as an alternative to investing in physical gold in November 2015.

The aim of SGB is to reduce demand, including through imports, for physical gold, and in the process reduce India’s Current Account Deficit.