sovereign gold bond (SGB), which are issued by the Reserve Bank India (RBI) on behalf of the government, open for public subscription from Monday (August 22) and will remain open till Friday (August 26). This is the second tranche of the SGB scheme for the financial year 2022-23 after the first tranche in June. Among other benefits, SGB can be used as collateral for a loan. Check Details:
“Bonds can be used as collateral for loans,” the Reserve Bank of India said in a notification to the bonds. The loan-to-value (LTV) ratio prescribed at par with normal gold loan as mandated by the Reserve Bank from time to time To be done.
SGBs are government securities, denominated in grams of gold. They are an alternative to holding physical gold. Investors will have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The bond is issued by the Reserve Bank of India on behalf of the Government of India.
In the FAQ also, it said, “Yes, these securities are eligible to be used as collateral for loans from banks, financial institutions and non-banking financial companies (NBFCs). The loan to value ratio will be the same as applicable to normal gold loans as prescribed by RBI from time to time. Lending against SGB will be subject to the decision of the Bank/Financing Agency, and cannot be presupposed as an authority.”
Who can buy bonds?
Sovereign Gold Bonds will be prohibited for sale to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
How can you buy SGB?
Bonds sold directly or through agents through commercial banks, Stock Holding Corporation of India Limited (SHCIL), Clearing Corporation of India Limited (CCIL), designated post offices (as may be notified), National Stock Exchange and BSE Will go
issue price
According to a notification from the Ministry of Finance, the issue price of SGB Series-II during the subscription period will be Rs 5,197. “The Government of India, in consultation with the Reserve Bank of India, has decided to allow a discount of Rs 50 per gram from the issue price to those investors who apply online and the payment is made through digital mode. For such investors, the issue price of the gold bond would be Rs 5,147 per gram of gold.
payment options
Payment for SGB will be through cash payment (maximum up to Rs 20,000) or demand draft or check or through electronic banking. You will get a discount of Rs 50 per gram of gold on online payment.
tenure
The tenure of the SGB will be for a period of eight years, with the option of premature redemption being exercised after the fifth year on the interest due date.
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