Sovereign Gold Bonds Scheme 22-23: First Tranche to Be Issued in June

On Thursday, the Ministry of Finance notified the Sovereign Gold Bonds (SGBs) scheme 2022-23. According to the notification, the government has decided to issue the SGBs in two tranches, in consultation with the Reserve Bank of India (RBI).

Date of Subscription of SGBs

The 2022-23- Series I of SGB’s subscription date starts on 20 June and ends on 24 June. The issuance date is 28 June. The 2022-23 Series II of SGB’s subscription date begins on 22 August and ends on 26 August. The issuance date is 30 August.

The following entities will sell the SGBs, either directly or through agents:

• Scheduled commercial banks
• Clearing Corporation of India Limited (CCIL)
• Stock Holding Corporation of India Limited (SHCIL)
• designated post offices
• Recognised stock exchanges, i.e., National Stock Exchange of India Limited and Bombay Stock Exchange Limited

Features of SGBs

The RBI will issue the SGBs on behalf of the government. The following are eligible to apply for the SGBs subscription:

• Resident individuals
• HUFs
• Trust
• Universities
• Charitable institutions

The government has decided the SGBs denomination to be multiples of a gram of gold with a basic unit of one gram. The tenor of the SGBs will be for eight years, with an option of premature redemption after the fifth year. A subscriber can exercise the redemption option on the date interest is payable.

The minimum permissible investment size will be one gram of gold. The maximum subscription limit is 4 kg for an individual and HUF and 20 kg for trusts and similar entities per fiscal year. In the case of joint holding, the investment limit of 4 kg will be applied to only the first applicant. 

The government has fixed the SGBs issue price in Indian Rupees, based on a simple average of the gold closing price of 999 purity, published for the last three working days preceding the subscription period week by the India Bullion and Jewellers Association Limited (IBJA).

Interested buyers can pay for the SGBs through cash up to a maximum of Rs.20,000, cheque, electronic banking or demand draft. The government has fixed the interest rate for the SGBs at 2.50% per annum, semi-annually on the nominal value.

Interested buyers must submit the KYC documents such as Voter ID, PAN, TAN or passport to purchase SGBs. They must submit the application with the PAN number issued by the income tax department to individuals and other entities.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@clear.in