New Delhi, April 20: The Series I of the sovereign gold bond scheme for 2020-21 has been opened for subscription on Monday by the Reserve Bank of India (RBI) on Centre’s behalf. The issue will close on Friday, and the certificates of bonds will be issued on April 28. The issue price for the sovereign gold bond has been fixed by the RBI at Rs 4,639 per gram.

The government will issue Sovereign Gold Bonds (SGBs) in six tranches. The second series of the scheme will be opened between May 11-15, third series will be opened between June 8-12. Earlier, the RBI had said, “Government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds. The Sovereign Gold Bonds will be issued in six tranches from April 2020 to September 2020.”

The tenor of the SGB will be eight years. Investors will have an option after the fifth year, which can be exercised on the interest payment dates. The RBI said, “The Bonds will be restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions.” The maximum limit of subscription is 4 kg for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March). Meanwhile, the minimum permissible investment in these bonds is one gram of gold.

People who are applying online and making payments using digital mode will get a discount of Rs 50. The investors will get a fixed 2.5 percent rate of interest per annum, which will be paid semi-annually on the nominal value. The sixth tranche (2020-21 Series VI) has been scheduled for August 31-September 4.

The sovereign gold bond scheme was launched in November 2015 with an objective to reduce the demand for physical gold. With this scheme, the government wants to shift a part of the domestic savings -- used for the purchase of gold -- into financial savings.

(With inputs from PTI)

(The above story first appeared on LatestLY on Apr 20, 2020 03:05 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website