"Specific changes have been made in the attributes of the scheme to make it more attractive, mobilise finances as per the target," a Finance Ministry release said.
"Flexibility has been given to Finance Ministry to design and introduce variants of SGBs with different interest rates and risk protection / pay-offs that would offer investment alternatives to different category of investors," it said.
The major change is in the gold investment limit per fiscal year which "has been increased to 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government," it added.
According to the government, the target mobilisation under the scheme was at Rs 15,000 crore in 2015-16 and at Rs 10,000 crore in 2016-17.
"The amount so far credited in the government's account is Rs 4,769 crore," it said.
SGBs are denominated in multiples of gram of gold with a minimum unit of 1 gram and maximum of 500 grams, which was 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.
The second tranche of the SGB scheme opened for public subscription on July 10.
The ministry announced the bonds would be issued on July 28, 2017.
"The issue price of the gold bonds will be Rs 50 per gram less than the nominal value (of gold)," it said.
The bonds would earn an interest of 2.50 per cent per annum, payable every six months on initial investment.
The tenure of the bonds is 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).
Last month, the Reserve Bank of India 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.
Major changes made to SGB scheme:
- Investment ceiling per fiscal year increased to 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts
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Ceiling will be counted on financial year basis and will include SGBs purchased in trading secondary market.
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Ceiling on investment will not include holdings as collateral by banks
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The government may, if necessary, allow higher commission to agents.
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
About VDC
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.