Sovereign Gold Bond Scheme 2022: The scheme was launched by the government in November 2015 under the Gold Monetization Scheme.
Under this scheme, investment in installments has been initiated by the Reserve Bank of India in consultation with the Government of India.
RBI notifies the terms and conditions of this scheme from time to time. SGB will be open as per the following calendar. The rate of SGB will be announced by RBI through a press release before each new investment.
As per RBI instructions, the PAN Number issued by Income Tax Department to investors is required to accompany each application as the PAN number of the first/single applicant is mandatory.
- Issued by the Reserve Bank of India on behalf of the Government of India.
- The bond will be denominated in multiples of the weight of gold in grams based on the unit of 1 gram.
- The bond tenure will be 8 years and exit from the scheme in the 5th, 6th and 7th years can be exercised on the interest payment dates.
- The minimum allowable investment limit is 1 gram of gold.
- The maximum investment limit is 4 kg for a single individual, 4 kg for Hindu undivided families, and 20 kg for trusts and similar entities in each financial year (April-March) as notified by the government from time to time. A self-declaration to this effect will be taken. The annual limit would include bonds initially issued by the government and purchased from the secondary market and held under-investment in various phases.
- In the case of joint holding, the investment limit of 4 kg will be applicable to the first applicant only.
- Before issuing the new issue, RBI will issue a press release detailing the issue price of the bond. The bond price will be determined in Indian Rupees based on the simple average closing price of 999 purity gold published by Bullion and Jewelers Association Limited (IBJA) for the last 3 business days of the week.
- The bond will be paid in cash (up to a maximum of Rs.20,000/-) or demand draft or check or through electronic banking.
- The Gold Bond will be issued in the form of Government of India stock under the Government Securities Act, 2006. A holding certificate will be issued to the investors for this purpose. Bonds can be converted into Demat form.
- The redemption price will be in Indian Rupees based on the simple average closing price of 999 purity gold published by IBJA for the last 3 business days of the week.
- All branches of the State Bank of India are authorized to accept these investments.
- Interest will be paid to the investors at a fixed rate of 2.50 percent per annum on the nominal value, payable on a half-yearly basis.
- Bonds can be used as collateral for loans. The Loan to Value (LTV) ratio is to be at par with the ordinary gold loans as per instructions issued by the Reserve Bank from time to time. The lien on the bond shall be marked in the depository by the authorized banks.
- Note: Loan against SGB will be subject to the decision of the Bank / Financing Agency and should not be taken as a right.
- Bonds can be traded on stock exchanges within a fortnight from the date notified by the Reserve Bank of India.
Its objective is to use the huge amount of gold deposited in the temples and houses of the country for productive purposes, reduce the import of gold, conserve foreign exchange and reduce the current account deficit.
- 2022-23 Series I June 20 -June 24, 2022, 28-Jun-22
- 2022-23 Series II August 22 – August 26, 2022, 30-Aug-22
- The government of India may, with prior notice, discontinue the scheme before the specified period.
- Hassle-free: ownership of gold without any physical possession (no risk and no storage cost)
- Tax treatment: Capital gains tax arising on redemption of SGB to an individual is exempted. Indexation benefit will be provided for long-term capital gains arising to any person on transfer of the bond.
- Traceability: Bonds will be traded on stock exchanges within a fortnight of the issue on the date notified by RBI.
- Transferability: The Bonds shall be transferable by execution of an instrument of transfer in accordance with the provisions of the Government Securities Act.