Fourth tranche of sovereign gold bond scheme opens for subscription

July 19, 2016

The fourth tranche of Sovereign Gold Bond (SGB) scheme opened for subscription, through which the government aims to attract a large number of investors to curb the demand for physical gold that is imported in large quantities draining the country’s foreign exchange.

The SGB issue price has been fixed at Rs. 3,119 per gram.

An investor can invest for a minimum unit of one gram and a maximum of 500 grams. The subscription is open till July 22.

The first three tranches had attracted an investment of Rs. 1,318 crore, equivalent to 4.9 tonnes of gold at the prices prevailing at those times. With the added features, it is expected that the fourth tranche of SGB would garner much higher investment.

SGB gives an interest of 2.75 per cent per annum, payable every six months on initial investment minus the risk of theft/loss or impurities associated with physical gold.

India imports about 1,000 tonnes of gold every year and it is the second-biggest constituent of the import bill after crude oil.

Gold imports showed a decline of about 8 per cent to $31.72 billion in 2015-16 due to weak global prices and are expected to keep a lid on the country’s current account deficit. Gold imports stood at USD 34.38 billion in 2014-15.


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