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Business Economy


Collections under Sovereign Gold Bond Scheme reach a new high

New Delhi, Jul 30 (UNI) Collections under the Sovereign Gold Bond (SGB) scheme, announcement in Union Budget 2015-16, has reached a new high as the 4th tranche realized an amount of around Rs 919 Crores.
Sovereign Gold Bond (SGB) scheme was launched as an alternative to physical gold in Nov 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). Three tranches of SGB scheme were floated in 2015-16. This financial year too from July 18-22, 2016, the GOI, in consultation with RBI, launched the 4th Tranche of SGB.
To improve attractiveness of SGB, new product features were introduced this time. The minimum subscription limit was reduced from 2 gm to 1 gm. The Capital gain tax arising on redemption of SGB to an individual was exempted, in line with the Budget 2016-17 announcements.
According to Finance Ministry release, this exemption was also extended to last 3 tranches too. The applications were allowed to be routed online and SGB was issued in Demat/ paper form. National Stock Exchange and Bombay Stock Exchange were notified as additional receiving offices. Trading of Gold Bonds was also operationalised.
The issue price of the Sovereign Gold Bond in 4th tranche was fixed at Rs 3,119 per gram of gold based on the basis of simple average of closing price of gold of 999 purity for the week July 11 to 15, 2016 as published by the India Bullion and Jewellers Association Ltd. (IBJA).
The amount realised through the 4th tranche, at around Rs 919 Crores, is the highest achieved as yet. The previous highest was Rs 746 Crores in the 2nd tranche when the issue price was only Rs 2600 per gram of gold. This was mobilised through over 1.95 lakh applications representing around 2.95 tonnes of gold.
These numbers are likely to go up further as the receiving offices are keying in the information of huge rush of applications received on the last day. The top 5 among the receiving offices were SBI, NSE, Bank of India, ICICI Bank and HDFC Bank, in that order. The total subscription in first 3 tranches was Rs 1318 Crores corresponding to 4.9 tonnes of gold.
UNI ADP RJ 2311
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