Gold Bonds

• Investments on gold bonds can be made by applying for these bonds through brokers authorized by SEBI.

• Investors can even go through other financial advisors of NSE (National Stock Exchange of India Limited) or the Bombay Stock Exchange Limited. Any channels specified by RBI (Reserve Bank of India) can be utilized.

• The different channels are Stock Holding Corporation of India (SHCIL), some designated post offices among others.

• These authorized brokers, advisors and other trading members provide the necessary application form. One can also conveniently download it from RBI’s authentic website. The downloaded application can be in demat or physical form.

• These bonds can be obtained through different scheduled commercial banks. The exceptions to it are the small finance banks and payment banks that do not offer these bonds.

Here are the various scheduled commercial banks that offer sovereign gold bonds.

Kotak Sovereign Gold Bond

Tranche: For the year 2019-20 series IV

The date of subscription: The date of subscription

The date of issuance: 17th September 2019

Features of sovereign gold bonds from Kotak

• Sovereign gold bonds 2019-20 are issued by RBI on behalf of the government of India, to the residents of India, charitable institutions, HUFs, trusts of India.
• The basic unit of gold denomination is of 1 gram and all bonds have been denominated in the multiples of gram(s).
• The tenor bond after investing in a bond is of 8 years. An exit period, if need be, is only after the 5th year. However, this can only be on the dates of interest payment.

• Investments:

• Minimum- 1 gram

• Maximum- 4kgs for individuals and HUFs and joint holdings for the first applicant only, 20kgs for trusts and other specified entities,

• The annual limit includes all bonds that have been subscribed during the first issuance by the Government under various tranches as well as those that have been bought from the Exchange or the Secondary Market.

• The issue price is based on the average closing price for the 24k gold price that is duly published by the Indian Bullion and Jewellers Association Limited on the 3 last working days of the last week, which is just before the end of the period of subscription.
  • It is issued under Government of India Stock under the 2006 GS Act. A Certificate of Holding is issued to the investor for the same.
  • Required documents for Know-your customer or the KYC are:
• Voter’s Identity Card
• PAN or Aadhar Card
• Passport or TAN Number
  • Bonds acquired by the banks would be accounted as a part of the bank’s SLR (Statutory Liquidity Ratio) which is done by the process of either hypothecation or by invoking lien or by taking a pledge alone.

ICICI Sovereign Gold Bond:

ICICI bank offers sovereign gold bonds on an assured interest rate eliminating risk and cost of storage under Sovereign gold bonds scheme by the government.

• The subscription period for the gold bond: The subscription period is from 9th September- 13th September

• Issue price on per gram denomination: Issue price: Online- Rs. 3,840 Offline- Rs. 3,890

• Interest received per annum: Interest per annum is 2.50%

• The date of gold bond issuance: The date September 17th, 2019

Features and benefits of sovereign gold bonds from ICICI bank

• Sales of gold bond are restricted to Indian residents; the bonds through ICICI bank online applications can be sold to those who have access to Internet Banking medium and iMobile App.
• However, for offline applications, ICICI bank offers investors the chance to apply for the tranche with the application forms provided in an ICICI branch.
• The minimum limit is of 1 gram for all, and the maximum limit is 4 kgs for individuals and HUFs, 20kg for trusts and government notified entities time to time.
• The interest rate paid to the investors would be on the initial investment amount as notified by The Reserve Bank of India for a particular tranche at its start. It is semi-annually payable.
• The tenor bond period is of 8 years and there is an exit choice from the 5th year onwards that can be used on the interest payment dates.
• The redemption price is in Indian rupee denomination and is the simple average which is based on price of closing of gold of 24k purity as established 3 days from the date of payment, as published by the Indian Bullion and Jewellers Association Ltd.

SBI Sovereign Gold Bond

• Tranche: For the year 2019-20 series IV

• The date of subscription: From 9th to 13th September, 2019.

• The date of issuance: 17th September 2019

• Minimum and maximum subscription: Minimum- 1 gram Maximum- 4 kgs- Individuals and HUFs 20kgs- Trusts etc.

Features of sovereign gold bonds from SBI bank

• All branches of SBI (State Bank of India) are authorized to accept the subscriptions.
• Bonds are to be purchased using Indian rupees, and through cash payments (with a maximum of Rs. 20,000). It can also be done through cheque payment or a demand draft payment or even through any mode of electronic payment.
• The gold bond is then issued as Government of India Stocks under Government Security Act, 2006.
• After subscribing for a gold bond, investors are issued with a Holding Certificate for the same. They can be converted to the demat form.
• The SGB can also be utilised as collateral at SBI bank’s discretion.

HDFC Sovereign Gold Bond

HDFC bank offers Sovereign gold bonds, and they term it as - ‘a good way to invest in gold online’. It is convenient as one does not require physical locker to store the gold obtained.

Features sovereign gold bonds from HDFC bank

• Gold bonds through HDFC bank can be applied for using HDFC bank’s Demat account through their net banking facility.
• Investors have to mandatorily provide their bank details so as to facilitate payment of interest/maturity value.
• Issue price of the gold bond is Rs. 3,890 per gram. For those who subscribe online and pay using digital modes, the per gram issuance price is less.
• The maximum and minimum limits are common across India, irrespective of the issuer. Similarly, fixed interest rate and the tenor of the bond are common too.

Bank of Baroda Gold Bond

• Tranche series 2019-20: Series IV
• Subscription date 2019: 9th- 13th September
• Date of issuance 2019: 17th September
• Price of issue in 2019: Rs. 3,890/-

Features of sovereign gold bond from Bank of Baroda

• Gold bond from Bank of Baroda, like other aforementioned banks, is under the supervision of the Government of India. Therefore, all gold bonds have the same features.
• It is to be noted that the bonds used for loan collaterals are a subject to bank’s decision and not a matter of right by the SGB holder. The Loan-Value ratio applies only to the ordinary gold that has been mandated by the RBI from time to time. Every bank marks a lien on these bonds as well.
• The transferability of the bond issued as Stock certificate will be according to the provisions and the rules of the 2006 Government Securities Act and the 2007 Government Securities Regulations.