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The government is set to issue the third and fourth tranches of the sovereign gold bond (SGB) scheme (2022-23). While the third tranche would be issued on December 27, 2022, the fourth tranche would be issued on March 14, 2023.

The subscription for the third tranche would open between December 19 and December 23, 2022, while the subscription for the fourth tranche would open between March 6 and March 10, 2023, the Finance Ministry said in a statement.

The SGBs will be sold through scheduled commercial banks (except small finance banks, payment banks and regional rural banks), Stock Holding Corporation of India Ltd (SHCIL), Clearing Corporation of India Ltd (CCIL), designated post offices and recognised stock exchanges, namely the National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd.

These would be issued by the Reserve Bank of India on behalf of the government. The SGBs will be restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions.

The SGBs will be denominated in multiples of gram(s) of gold with a basic unit of one gram. The tenure of the SGB will be for a period of eight years with an option of premature redemption after 5th year to be exercised on the date on which interest is payable, while the minimum permissible investment will be one gram of gold.

The maximum limit of subscription shall be 4 kg for individuals, 4 kg for HUF and 20 kg for trusts and similar entities per fiscal year (April-March) notified by the government from time to time. A self-declaration to this effect will be obtained. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the secondary market, during the fiscal year.

In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only, the ministry said.

The price of SGB will be fixed in Indian rupees on the basis of a simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Ltd (IBJA) for the last three working days of the week preceding the subscription period. The issue price of the SGBs will be less by Rs 50 per gram for the investors who subscribe online and pay through digital mode.

Payment for the SGBs will be through cash payment (upto a maximum of Rs 20,000) or demand draft or cheque or electronic banking.

The redemption price will be in Indian rupees based on the simple average of closing price of gold of 999 purity, of previous three working days published by the IBJA Ltd.

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