Gold bond scheme: Government realises record Rs 919 crore in 4th tranche

New Delhi: Government has realised Rs 919 crore through the fourth tranche of its Sovereign Gold Bond scheme -- the highest so far.

"Collections under the Sovereign Gold Bond scheme reached a new high. The amount realised through the fourth tranche, at around Rs 919 crore, is the highest achieved as yet," the Finance Ministry said in a release.

The previous highest was Rs 746 crore, which was realised in the second tranche, when the issue price was Rs 2,600 per gram of gold.

In the latest subscription, the issue price was fixed at Rs 3,119. This time around, the amount was mobilised through over 1.95 lakh applications representing around 2.95 tonnes of gold.

These numbers are likely to go up as receiving offices are keying in data for huge number of applications received on the last day.
SBI, NSE, Bank of India, ICICI Bank and HDFC Bank were the top five receiving offices. The total subscription in the first three tranches was Rs 1,318 crore corresponding to 4.9 tonnes of gold.

In the Union Budget 2015-16, the SGB scheme was launched as an alternative to keeping physical gold.

Launched in November 2015, the aim of SGB is to reduce demand, including through imports, for physical gold, and in process reduce India's current account deficit (CAD).

Apart from the three tranches in 2015-16, the government in consultation with RBI launched the fourth one, which was open between July 18-22.

To improve attractiveness of the scheme, new features were introduced in the latest instalment, where the minimum subscription limit was brought down to 1 gm, from 2 gm.

The capital gain tax arising out of redemption stood exempted, in line with the Budget 2016-17 announcement, said the ministry. This exemption was extended to the other three tranches, too.

The product earns an interest rate of 2.75 percent per annum, payable half yearly on initial investment.

The government allowed the applications to be routed online and the scheme was issued by way of demat or paper.

Market exchanges BSE and NSE were notified as additional receiving offices and trading of gold bonds was also operationalised.

The ministry said aggressive marketing by the government and receiving offices helped in mobilising a record amount, and judging the investor response, it will come up with more tranches in the current fiscal.