The government has said that the first tranche of the sovereign gold bonds (SGB) will open for public subscription on April 24. The issue price of the bonds has been fixed at Rs 50 per gram, less than the nominal value of gold and the bonds would earn an interest of 2.75 per cent per annum, payable every six months on initial investment, finance ministry said in a statement.
"Applications for the bond will be accepted from April 24-April 28, 2017. The Bonds will be issued on May 12, 2017," the statement added. The tenor of the bond will be for a period of 8 years with exit option from fifth year to be exercised on the interest payment dates.
The minimum investment limit into these bonds will be 1 gram of gold, while the maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year.
"The price of bonds 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 for the week (Monday to Friday) preceding the subscription period.
The issue price of the gold bonds will be Rs 50 per gram less than the nominal value," it said. The bonds will be sold through banks, post offices, Stock Holding Corporation of India (SHCIL), and recognised stock exchanges -- National Stock Exchange (NSE) and BSE.