The government expects to mobilise more than Rs 820 crore from the fifth tranche of Sovereign Gold Bond (SGB) scheme, and the next tranche will be launched with more attractive features before Diwali.
New Delhi: The government expects to mobilise more than Rs 820 crore from the fifth tranche of Sovereign Gold Bond (SGB) scheme, and the next tranche will be launched with more attractive features before Diwali.
"The amount realised through the 5th tranche of SGB scheme is expected to cross Rs 820 crore. This was mobilised through over 2 lakh applications representing around 2.37 tonnes of gold.
"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 Finance Ministry said in a statement.
The government had mobilised Rs 921 crore from the 4th tranche.
The statement further said that the government will come up with more tranches in 2016-17 and the next tranche of SGB is expected around third week of October with additional features to attract more consumers.
The issue price of the 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 99.9 purity for the week August 22 to 26, as published by the India Bullion and Jewellers Association (IBJA).
The aggressive marketing of the product by government including through its receiving offices, like banks, post offices, NSE and BSE helped in mobilising such encouraging response, it said.
As per the Union Budget 2015-16, the SGB scheme was launched as an alternative mode of investment to physical gold in November 2015.
The aim of SGB is to reduce demand, including through imports, for physical gold, thereby reducing the Current Account Deficit.
Three tranches of SGB scheme were floated in 2015-16. In the current financial year, two tranches have been launched (4th tranche from July 18-22, 2016 and 5th tranche from September 01-09).
The total subscription in first 4 tranches was Rs 2,239 crore corresponding to 7.85 tonnes of gold. The highest mobilisation was Rs 921 crore in the 4th tranche when the issue price was Rs 3,119 per gram of gold.
The sustained and encouraging response of the investors to the SGB scheme (Series-I and series-II) of 2016-17, indicates that the product has come of age, and is increasingly becoming popular amongst general public due to advantages it offers over physical gold, it said.
The product also earns an interest rate of 2.75 per cent per annum, semi-annually payable on initial investment, it said.