The second tranche of the Sovereign Gold Bond (SGB) Scheme has attracted 3.16 lakh applications for 2,790 kg of gold worth Rs.726 crore, according to a government statement issued on Thursday.
“The trend during the second tranche of SGB shows that the scheme is gradually picking-up amongst the investors with increase in awareness and more clarity about the provisions of the scheme,” according to the statement. The application window for the tranche was from January 18 to January 22, 2016.
“The second tranche of Gold Bonds: Outcome significantly better than 1st tranche. Scheme picking up,” tweeted Economic Affairs Secretary Shaktikanta Das on Thursday.
The first tranche of the scheme, opened in November 2015, attracted only 62,169 applications for 915.9 kg of gold worth Rs.246.20 crore.
The idea behind the SGB scheme is to wean away those who use gold as a store of value and encourage them to invest in the gold bonds as opposed to the yellow metal itself. This is aimed at reducing India’s substantial gold imports. Gold imports in December 2015 hit a three-month high of $3.8 billion, up 179 per cent over the same month the previous year.
The bonds are issued by the Reserve Bank of India on behalf of the government. “The maximum amount which could be subscribed is 500 grams per person per financial year. The government has fixed the rate of interest on gold bonds for the year 2015-16 as 2.75 per cent per annum, payable on a half-yearly basis,” according to the statement. The tenor of the bond is for eight years with an exit option from the fifth year onwards.
