"The government of India, in consultation with the Reserve Bank of India, has decided to issue Sovereign Gold Bonds 2017-18 - Series II. Applications for the bond will be accepted from July 10, 2017, to July 14, 2017," a Finance Ministry statement said.
The ministry announced the bonds would be issued on July 28, 2017.
"The price of bonds will be fixed in Indian Rupees on the basis of simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association for the week (Monday to Friday) preceding the subscription period," it said.
"The issue price of the gold bonds will be Rs 50 per gram less than the nominal value (of gold)," it added.
The bonds would earn an interest of 2.50 per cent per annum, payable every six months on initial investment.
The tenure of the bond will be for a period of eight years, with an exit option from the fifth year to be exercised on the interest payment dates.
The government said the bonds would be sold through banks, post offices, Stock Holding Corporation of India (SHCIL) and recognised stock exchanges -- National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
SGBs are denominated in multiples of gram of gold with a minimum unit of 1 gram and maximum of 500 grams, which is the maximum amount permissible for subscription per person per fiscal year.
Sovereign Gold Bonds can also be held in demat form for ease of trading.
To date, the government has issued eight tranches of SGBs mobilising 6,410 kg of gold.
Last month, the RBI said it had issued SGBs worth Rs 5,400 crore.
The government launched the Sovereign Gold Bond Scheme in November 2015 as an alternative to purchasing metal gold.
The scheme intends to reduce the demand for physical gold and mobilise the idle gold held by households and institutions in the country and to put this gold into productive use in the long run.
This will help reduce the current account deficit by reducing the country's reliance on the import of gold to meet the domestic demand.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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