The amount realised through the 5th Tranche of Sovereign Gold Bond (SGB) Scheme, is expected to cross Rs. 820 crore. This was mobilised through over 2.00 lakh applications representing around 2.37 tonnes of gold, PIB press release said.
The 5th Tranche of Sovereign Gold Bond (SGB) Scheme was open from 1st to9th September, 2016.
These numbers are likely to go-up further as the receiving offices are still in the process of uploading information of huge rush of applications received on the last day.
The large number indicates that the product is increasingly becoming popular amongst the general public due to advantages it offers over physical gold, namely use as collateral for loans.
Capital Gain Tax exemption on redemption, Zero risk of theft/ impurities associated with handling of physical gold; tradability through Stock Exchanges and also availability in DEMAT and paper form.
The product, in addition, earns an interest rate of 2.75% per annum, semi-annually payable on initial investment.
The aggressive marketing of the product by Govt of India, including through its receiving offices, namely Banks, Post Offices, NSE and BSE helped in mobilizing such encouraging response.
Banks such as SBI at Rs 245 Crore subscription and Bank of India at Rs 56 Crore subscription were the top performers. The Post Offices did their bit by attracting maximum number, around 22,000, applicants. The total mobilisation by Post Offices is expected at around Rs. 15-20 crore.
The issue price of the Sovereign Gold Bond in 5th tranche worked-out to a still higher level Rs 3,150 per gram of gold based on the average of closing price of gold of 999 purity for the week August 22 to 26, 2016, as published by the India Bullion and Jewellers Association Ltd.