Everything You Need To Know About Sovereign Gold Bond Scheme 2023-24
In February 2024, the Reserve Bank of India (RBI) issued the next trance (Series IV) of the Sovereign Gold Bond (SGB) 2023-24 from February 12, 2024. This trance will remain open for five days until 16th February 2024. The issue price for the Sovereign Gold Bond (SGB) 2023-24 series IV is Rs 6,263 per gram. Before this, the RBI issued Series I for Sovereign Gold Bond (SGB) 2023-24 at Rs 5,926, Series II at Rs 5,923, and Series III at Rs 6,199.
Everything You Need To Know About Sovereign Gold Bond Scheme 2023-24
Sovereign Gold Bond Scheme 2023-24: Highlights
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Sovereign Gold Bond Scheme 2023-24 Series IV: Highlights |
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Issued by |
Reserve Bank of India |
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Issue Date for Series IV |
12th February 2024 – 16th February 2024 |
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Issue price for Series IV |
Rs 6,263 |
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Discount |
Rs 50 per gram (applicable only on online payment) |
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Interest |
2.50 % |
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Tenor |
8 Years Note: Premature redemption after the fifth year |
What is Sovereign Gold Bond Scheme?
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The Sovereign Gold Bond Scheme (SGB) scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings into financial savings.
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These Gold Bonds are issued as Government of India Stock, under the Government Securities (GS) Act, 2006.
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It is issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
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Bonds are sold through:
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Commercial banks
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Stock Holding Corporation of India Limited (SHCIL),
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Designated post offices
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Recognized stock exchanges viz., National Stock Exchange (NSE) of India Limited and Bombay Stock Exchange (BSE), either directly or through agents.
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Sovereign Gold Bond Scheme 2023-24: Eligibility
Any resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions are eligible to buy the Sovereign Gold Bond.
Sovereign Gold Bond Scheme 2023-24: Term
The Sovereign Gold Bonds have a maturity period of eight years, with an option to prematurely exit after the first five years of investment.
Sovereign Gold Bond Scheme 2023-24: Permissible limit
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Any resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions are eligible to buy the Sovereign Gold Bond within a prescribed limit, set by the RBI.
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These bonds can be purchased in multiples of one unit, up to certain thresholds for different investors, which is as follows:
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Minimum permissible unit: 1 gram of Gold
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Upper limit:
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Retail (individual) investors: 4 kilograms (4,000 units) per financial year
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HUFs: 4 kilograms (4,000 units) per financial year
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Trusts and similar entities: 20 kilograms per financial year
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Sovereign Gold Bond Scheme 2023-24: Issue Price
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The issue price of different series of Sovereign Gold bond prices is linked to the price of gold of 999 purity (24 carats), which is published by India Bullion and Jewellers Association (IBJA), Mumbai.
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Here is the list of issue prices of different Sovereign Gold Bond 2023-24 series:
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Series |
Month |
Price per Gram |
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Series 1 |
Jun-23 |
Rs. 5,926 |
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Series 2 |
Sep-23 |
Rs. 5,923 |
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Series 3 |
Dec-23 |
Rs. 6,199 |
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Series 4 |
Feb-24 |
Rs. 6,263 |
Sovereign Gold Bond Scheme 2023-24: Interest Rate
The interest for the Sovereign Gold Bond Scheme 2023-24 is a fixed rate of 2.5% per annum and is applicable on the scheme, payable semi-annually.
Sovereign Gold Bond Scheme 2023-24: Discount Rate
Those Investors, who are making payments through online mode will receive a discount of Rs 50 per gram, reducing the issue price to Rs 6,213, as per the Reserve Bank of India (RBI).
Sovereign Gold Bond Scheme 2023-24: Risk
This investment involves monetary risks if gold prices fall in future.
Sovereign Gold Bond Scheme 2023-24: Benefits/ Disadvantages
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Benefits:
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These bonds can be used as collateral for loans.
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The profit arising on redemption of SGB to an individual has been exempted.
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Disadvantage:
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It is a long-term investment and can be prematurely redeemed in the fifth year of investment.
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These bonds are listed on exchange but the trading volumes are not high.
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Sovereign Gold Bond Scheme 2023-24: Frequently Asked Questions (FAQ)
1. Do, these Sovereign Gold Bonds can be used for trading?
Ans: Yes, these Gold Bonds shall be eligible for trading.
2. Can these Sovereign Gold Bonds be transferred?
Ans: The Gold Bonds issued in the form of Stock Certificate are transferable by execution of an Instrument of transfer as in Form 'F', by the provisions of the Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulations, 2007, published in part III, Section 4 of the Gazette of India dated the 1st December 2007.
3. Can I take loan against these Sovereign Gold Bonds?
Ans: (i) The Gold Bonds issued under this Scheme may be used as collateral security for availing any loan. Such loans could be granted by marking lien on Gold Bonds appropriately.
(ii) The Loan to Value ratio as applicable to any ordinary gold loan mandated by the Reserve Bank of India shall also apply to the Bonds issued under this Scheme.
Note: The loan against Gold Bonds would be subject to decision of the bank/financing agency, and cannot be inferred as a matter of right.
4. Do these Sovereign Gold Bonds are eligible for the Statutory Liquidity Ratio (SLR)?
Ans: Bonds acquired by the banks through the process of invoking lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.
