For the first tranche of the Sovereign Gold Bond Scheme 2022-23, the issue price has been set at Rs 5,091 per gram

The Reserve Bank of India (RBI) announced on Friday that the first tranche of the Sovereign Gold Bond Scheme 2022-23 will open for subscription on June 20 at a price of 5,091 per gramme of gold. Subscriptions for the first tranche will be accepted until June 24, 2022.

In a statement today, RBI said, “The nominal value of the bond based on the simple average closing price [published by the India Bullion and Jewellers Association Ltd (IBJA)] for gold of 999 purity of the last three business days of the week preceding the subscription period, i.e. June 15, June 16 and June 17, 2022 works out to ₹5,091 per gram of gold.”

However, after consulting with the RBI, the government has agreed to grant a discount of Rs 50 per gramme less than the nominal value to investors who apply online and pay for the application using digital means.

On behalf of the government, the RBI will issue the first series of the Sovereign Gold Bond Scheme 2022-23. Individuals, HUFs, Trusts, Universities, and Charitable Institutions will not be able to purchase SGBs.

Following the bidding procedure, the RBI has chosen June 28 as the issue date for the first tranche of bonds.

A Certificate of Holding will be issued to the investors. The SGBs will be able to be converted into Demat.

The SGBs, in particular, can be used as collateral for loans. The loan-to-value (LTV) ratio must be fixed at the same level as the regular gold loan mandated by the Reserve Bank.

The SGBs will also be available for trading. Furthermore, RBI stated that commission for the distribution of the SGB shall be paid at a rate of one percent of the total subscription collected by receiving offices, with receiving offices sharing at least half of the fee with agents or sub-agents for business secured through them.