The government announces two more tranches of sovereign gold bonds for 2023–24: Recent announcements by the Reserve Bank of India (RBI) concern two tranches of the Sovereign Gold Bonds (SGB) program for 2023–24. Subscriptions for the SGB 2023-24 Series III will be accepted from December 18–22. December 28 is the date of issuance for this SGB tranche. The second tranche of sovereign gold bonds will be released on February 21, 2024, after subscriptions from February 12–16, 2024.
Selected post offices, stock exchanges (NSE and BSE), scheduled commercial banks (excluding small finance banks, payment banks, and regional rural banks), SHCIL, and CCIL will deliver SGBs. The SGBs shall be expressed as multiples of grams of gold, with one gram serving as the fundamental unit.
Guide to the Sovereign Gold Bond (SGB) programme
SGB 2023-24 rate of interest and loan collateral
On the nominal value, investors shall be entitled to interest at the rate of 2.50% per annum, payable semi-annually. Additionally, the SGBs may be pledged as security for loans. All common gold loans must adhere to the Reserve Bank of India’s periodic regulations regarding the loan-to-value ratio.
Instructions for applying for SGBs online
Online sovereign gold bond (SGB) applications are accepted by SBI, ICICI Bank, HDFC Bank, Punjab National Bank, and Bank of Baroda. Online investors who register and pay digitally would receive gold bonds for Rs 50 per gram cheaper than issuance.
Rules of KYC for SGBs
Know-your-customer (KYC) requirements for SGBs are identical to those for tangible gold purchases. Voter identification, an Aadhaar card or PAN, or a TAN card or passport will be required as KYC documents. The PAN number, which is issued to individuals and other entities by the Income Tax Department, must be appended to each application.
Application eligibility for SGBs 2023–24
Eligible to apply for this initiative are resident individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable universities.
The minimum and maximum subscription limits authorized by SGBs
The minimum allowable subscription amount in this scheme is one gram of gold, while the maximum allowable subscription limit is subject to variation based on the characteristics of the investor. Individual subscription limits for HUF are capped at 4 kilograms.
This plan allows trusts and similar businesses to subscribe to up to 20 kg of gold, subject to Indian government announcements during the fiscal year (April–March). When joint ownership is present, the investment cap of 4 kg will exclusively apply to the initial applicant.
“A self-declaration to this effect will be required from investors during the subscription application process.” “SGBs purchased from the secondary market and those subscribed for in various tranches will be included in the annual ceiling for the fiscal year,” the Finance Ministry stated in a press release.
Method of payment for SGBs
Bonds can be paid using cash, demand drafts, checks, or online banking up to Rs 20,000.
When are SGBs excisable?
After a minimum of five years, an investor may sell SGBs. If kept in demat form, it can be traded on bourses if the tranche has enough liquidity. Colonel (Retd.) said the price at which an investor sells an SGB through the bourses depends on gold prices and trading patterns. Sanjeev Govila, CEO of Hum Fauji Initiatives, a financial planning firm and Sebi-registered investment advisor (RIA),.
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