Gold Bond Scheme launch on July 18 may prove popular owing to uptake for gold recently

Date : 18.7.2016

Gold Bond Scheme launch on July 18 may prove popular owing to uptake for gold recently

NEW DELHI: The finance ministry has said following the uptake for gold in recent months the upcoming issue of Gold Bond Scheme from Monday will prove to be a worthy investment for resident Indians. 

"Next tranche of Sovereign Gold Bond Scheme to open from July 18-22. Excellent opportunity to invest and benefit from gold price appreciation," Economic Affairs Secretary Shaktikanta Das tweeted on Saturday. 

"Gold Bond Scheme: Innovative savings instrument for all sections. Attractive substitute for purchase of physical gold as a mode of savings," the secretary added. 

In recent months, gold prices have surged from Rs 30,000 per 10 grams (24 carat) to Rs 31,500 per 10 grams now. It was around Rs 33,000 a fortnight back. 

As regards the price, the Reserve Bank of India has already notified the same. 

"The issue price of the Sovereign Gold Bond has been fixed at Rs 3,119 per gram of gold. The rate has been fixed on the basis of simple average of closing price of gold of 999 purity for the week July 11-15, 2016 as published by the India Bullion and Jewellers Association," the central bank said. 

"Applications for the bond will be accepted from July 18, 2016 to July 22, 2016. The bonds will be issued on August 5, 2016," the Finance Ministry statement said recently. 

Finance Minister Arun Jaitley had in last year's Union Budget announced developing the Sovereign Gold Bond, as a measure to contain demand for the metal in physical form. In Budget 2016-17 he has proposed that redemption of sovereign gold bonds by an individual be exempt from capital gains tax. 

The bonds will be sold through banks, Stock Holding Corporation of India, designated post offices and recognised stock exchanges, the statement said. 

The government received subscriptions of Rs 726 crore for 2,790 kg gold under the second tranche of the scheme in January, while the first tranche launched in November had received a subscription for 915.95 kg of gold worth Rs 246 crore. 

In March, the third edition of the scheme, a component of the government's market borrowing programme, received a poorer response getting subscription of 1,128 kg gold, amounting to Rs 329 crore. 

The gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of five to seven years with a rate of interest to be calculated on the metal's value at the time of investment. The scheme has an annual ceiling of 500 grams per person.