NSE unveils online bidding platform for gold bond issuance

Mumbai: To facilitate orderly trading in sovereign gold bonds, top stock exchange NSE has introduced online bid collection facility for such issuances.

The bourse has received approval from the Reserve Bank of India (RBI) to act as a receiving office for sovereign gold bond (SGB) issuances.

So far, three tranches of the bonds have been issued amounting to about Rs 1,322 crore and the fourth one is expected by July 18.

"An online bid collection facility shall be available to trading members on existing web based e-IPO platform," the NSE said in a notice.

"Bid entry for gold bonds shall be available through single bid entry and bulk upload facility."

Accordingly, the exchange will collect bids from its registered stock brokers for their clients for the gold bond issuance.

Sovereign gold bonds provide investors a choice to diversify portfolio without the need to buy the metal in physical form. The scheme was announced by the government on October 30, 2015.

These bonds are issued by RBI on behalf of the government. The tenure of the bonds is eight years with an exit option from fifth year to be exercised on the interest payment dates.

The bonds will carry an interest rate of 2.75 per cent (fixed rate) per annum on the amount of initial investment.

Interest is to be paid half-yearly and the last interest will be payable on maturity, along with the principal.