Programs in News: Sovereign Gold Bond (SGB) Scheme 2022-23. The Government of India recently announced the dates and issue price of the Sovereign Gold Bond (SGB) Scheme 2022-23 (Series 1). The issue price of the SGB scheme this time is Rs 5091 per gram. The subscription period will be open till 24th June with the settlement date on 28th June 2022.
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- The issue price of the SGB scheme this time is Rs 5091 per gram. The subscription period will be open till 24th June with the settlement date on 28th June 2022.
- Investors applying online and paying online get a discount of Rs 50 per gram. The issue price for such investors would be Rs 5,041 per gram. The issue date will be 28 June 2022.
- “The nominal value of the bond is based on the simple average closing price for gold of 999 purity of the last three business days of the week preceding the subscription period, works out to Rs 5,091 per gram of gold,” the Reserve Bank of India said.
- According to the official release, the tenure of the SGB will be for eight years, with an option for premature redemption after the 5th year, the date on which interest will be payable
- The minimum allowable investment would be 1 gram of gold. The investors will also be compensated at a fixed rate of 2.50 per cent per annum, payable half-yearly on the nominal value.
- Interested buyers can pay either through cash (up to a maximum of Rs 20,000), demand draft, check or electronic banking. After issuance, a holding certificate will be issued for the same, which is eligible for conversion in Demat form.
- Bonds will be sold through Nationalized Banks, Scheduled Private Banks, Post Offices, Scheduled Foreign Banks, Stock Holding Corporation of India Limited and authorized Stock Exchanges either directly or through their agents.
- Sovereign Gold Bonds can be bought by Individuals, Hindu Undivided Families (HUFs), Trusts, Charitable Institutions and Universities. The minimum investment in bonds will be one gram with a maximum membership limit of 4 kg for individuals and HUFs and 20 kg for trusts and other entities, respectively.
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Sl. No. |
Item |
Details |
|
1 |
Product name |
Sovereign Gold Bond Scheme 2022-23 |
|
2 |
Issuance |
To be issued by Reserve Bank of India on behalf of the Government of
India. |
|
3 |
Eligibility |
The SGBs will be restricted for sale to resident individuals, HUFs,
Trusts, Universities and Charitable Institutions. |
|
4 |
Denomination |
The SGBs will be denominated in multiples of gram(s) of gold with a
basic unit of one gram. |
|
5 |
Tenor |
The tenor 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. |
|
6 |
Minimum size |
Minimum permissible investment will be One gram of gold. |
|
7 |
Maximum limit |
The maximum limit of subscription shall be 4 KG for individual, 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. |
|
8 |
Joint holder |
In case of joint holding, the investment limit of 4 KG will be
applied to the first applicant only. |
|
9 |
Issue price |
Price of SGB 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 Limited (IBJA) for the last three working
days of the week preceding the subscription period. The issue price of the
SGBs will be less by ` 50 per gram for the investors who subscribe online and
pay through digital mode. |
|
10 |
Payment option |
Payment for the SGBs will be through cash payment (upto a maximum
of `20,000) or demand draft or cheque or electronic banking. |
|
11 |
Issuance form |
The SGBs will be issued as Government of India Stock under Government
Securities Act, 2006. The investors will be issued a Certificate of Holding
for the same. The SGBs will be eligible for conversion into demat form. |
|
12 |
Redemption price |
The redemption price will be in Indian Rupees based on simple average
of closing price of gold of 999 purity, of previous three working days
published by IBJA Ltd. |
|
13 |
Sales channel |
SGBs will be sold through Commercial banks, Stock Holding Corporation
of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL),
designated post offices (as may be notified) and recognised stock
exchanges viz., National Stock Exchange of India Limited and
Bombay Stock Exchange Limited, either directly or through agents. |
|
14 |
Interest rate |
The investors will be compensated at a fixed rate of 2.50 percent
per annum payable semi-annually on the nominal value. |
|
15 |
Collateral |
Bonds can be used as collateral for loans. The loan-to-value (LTV)
ratio is to be set equal to ordinary gold loan mandated by the Reserve
Bank from time to time. |
|
16 |
KYC documentation |
Know-your-customer (KYC) norms will be the same as that for purchase
of physical gold. KYC documents such as Voter
ID, Aadhaar card/PAN or TAN /Passport will be required. Every application
must be accompanied by the ‘PAN Number’ issued by the Income Tax Department
to individuals and other entities. |
|
17 |
Tax treatment |
The interest on SGBs shall be taxable as per the provision of Income
Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of
SGB to an individual is exempted. The indexation benefits will be provided to
long term capital gains arising to any person on transfer of bond. |
|
18 |
Tradability |
SGBs shall be eligible for trading. |
|
19 |
SLR eligibility |
SGBs acquired by the banks through the process of invoking
lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity
Ratio. |
|
20 |
Commission |
Commission for distribution of the bond shall be paid at the rate of
one percent of the total subscription received by the receiving offices
and receiving offices shall share at least 50 percent of the commission so
received with the agents or sub agents for the business procured through
them. |
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