Second edition of gold bond scheme opens

Mumbai, Jan 18 (IANS) The second edition of sovereign gold bond scheme opened for subscription by resident Indians for five days from Monday, with the value of the commodity fixed at Rs.2,600 per gram of 99.9 percent purity, and an interest rate of 2.75 percent per annum.

“The bonds shall be denominated in units of one gram of gold and multiples thereof. The minimum investment in the bonds shall be two grams with maximum limit of subscription of 500 grams per person per fiscal year,” the Reserve Bank of India, said announcing the launch.

“The scheduled commercial banks, designated post offices and the Stock Holding Corp of India are authorised to receive applications for the bonds either directly or through agents,” the central bank added in the statement.

These bonds will be repayable on the expiry of eight years from February 8, which will be taken as the the issue date. Pre-mature redemption is permitted from the fifth year. The price taken for redemption will in rupees, taking into account the the previous week’s average.

Finance Minister Minister Arun Jaitley had underscored in his federal budget for 2015-16 the need to develop a financial asset ike the gold bond as an alternative to people purchasing metal gold. The first tranche was open for subscription from November 5-20.

The government claimed thereafter that the the response was excellent — 62,169 applications were received for a total subscription of 915.953 kg gold, amounting to Rs.246.20 crore by banks and Post Offices.

Highlights of the scheme in its second edition:

– Issue price fixed at Rs.2,600 per gram of 99.9 percent purity

– Maximum subscription is 500 grams per person per fiscal

– Minimum subscription two grams and in multiples of one gram, thereafter

– Rate of interest for 2015-16 fixed at 2.75 per annum payable half-yearly

– Bonds in both in demat and paper form

– Availability at designated banks and post offices

– Tenor of eight years, with exit option from 5th year

– Exemption from capital gains tax available.

– On maturity, investor to get equivalent value of gold invested at then prevailing price

– Bonds may be used as collateral for loans

– Bonds can also be traded from such date as may be notified by central bank.

-Indo-Asian News Service

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