RBI Announces Sovereign Gold Bond Schemes 2023-24: Series III & IV Details Revealed

Gold price

December 13, 2023

New Delhi, India

Sovereign Gold Bond Schemes 2023-24

In a recent announcement, the Reserve Bank of India (RBI) has unveiled the details of the Sovereign Gold Bond (SGB) Schemes for the financial year 2023-24, offering investors valuable opportunities for gold-backed investments.

Series III Subscription Details:

The subscription window for Series III is set from December 18th to 22nd, with bonds to be issued on December 28th. These government securities, denominated in grams of gold, serve as an alternative to physical gold holdings.

Series IV: Awaiting in February 2024:

Investors eyeing Series IV can mark their calendars for the subscription period running from February 12 to February 16, 2024, with issuance scheduled for February 21, 2024.

Key Points for Investors:

  1. Eligibility: Limited to resident individuals, HUFs, Trusts, Universities, and Charitable Institutions.
  2. Denomination: Bonds available in multiples of grams of gold, with a basic unit of one gram.
  3. Investment Tenure: Eight years with an option for premature redemption after the 5th year.

Subscription Limits:

Investors should note the minimum permissible investment of one gram of gold and maximum subscription limits as per government notifications.

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Price Determination and Discounts:

The issue price, in Indian Rupees, is based on the simple average of the closing price of gold of 999 purity for the last three working days. Subscribers online, paying through digital mode, enjoy a discount of Rs 50 per gram.

Payment and Issuance Process:

Payment methods include cash (up to Rs 20,000), demand draft, cheque, or electronic banking. SGBs are issued as Government of India Stock and are eligible for conversion into demat form.

Redemption and Trading:

The redemption price is in Indian Rupees, determined based on the average closing price of gold of 999 purity of the previous three working days. SGBs are eligible for trading.

Distribution and Commission:

SGBs will be sold through scheduled commercial banks, designated post offices, and recognized stock exchanges. A one percent commission is paid to receiving offices, with at least 50% shared with agents or sub-agents.

Interest and Collateral Benefits:

Investors are compensated at a fixed rate of 2.50% per annum, payable semi-annually. SGBs can be used as collateral for loans, with the loan-to-value ratio as applicable to ordinary gold loans.

Tax and Regulatory Aspects:

Indexation benefits are provided for long-term capital gains. SGBs acquired by banks through lien/hypothecation/pledge are counted towards the Statutory Liquidity Ratio.

With these detailed insights, potential investors can make informed decisions about participating in the Sovereign Gold Bond Series III and IV, contributing to a diversified and gold-backed investment portfolio.

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