Sovereign gold bonds' next tranche will begin trading on the stock exchange from Monday, providing investors a greater choice to diversify portfolio without the need to buy the metal in physical form.
Sovereign gold bonds' next tranche will begin trading on the stock exchange from Monday, providing investors a greater choice to diversify portfolio without the need to buy the metal in physical form.
"BSE's online bidding platform for Sovereign Gold Bond Scheme (SGB) will be open for subscription from July 18-22, 2016 for trading members to subscribe to the issue for their clients," the exchange said in a circular.
So far, three tranches of the bonds have been issued amounting to about Rs 1,322 crore.
Sovereign Gold Bonds -- government securities denominated in grams of gold -- offer an alternative to holding gold in physical form. The scheme was announced by the government on October 30, 2015.
The bond is issued by RBI on behalf of the government and investors can apply for the bonds at the price as disseminated by RBI.
"To support the government's objective of providing the investors an alternative to buying physical gold and to encourage members and their client s participation on the exchange, BSE will pass entire one per cent commission received from the RBI to the members for this tranche," the bourse said.
Under the scheme, gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.
The scheme is aimed at reducing demand for gold in physical form by encouraging people to buy the commodity in demat or the paper form.
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