New Delhi– The sixth tranche of Sovereign Gold Bond (SGB) is expected to rake in more than Rs 820 crore that is expected to be realised from the fifth tranche issue, the Union Finance Ministry said on Thursday.

In a statement issued here, the Finance Ministry said the next tranche of SGB scheme is expected to be around third week of October 2016 ahead of Diwali with additional features.

According to the Finance Ministry, the amount realised through the fifth tranche of SGB is likely to cross Rs 820 crore from over two lakh applications representing around 2.37 tonnes of gold.

“These numbers are likely to go up further as the receiving offices are still in the process of uploading information of huge rush of applications received on the last day,” the statement said.

The State Bank of India (SBI) fetched Rs 245 crore subscription and Bank of India Rs 56 crore. They were the top mobilisers.

“The Post Offices did their bit by attracting maximum number, around 22,000, applicants. The total mobilisation by Post Offices is expected at around Rs 15-20 crore,” the statement said.

The fifth tranche of SGB scheme was open from September 1 to 9, 2016, and the issue price was Rs 3,150 per gram of yellow metal.

The central government launched the SGB scheme as an alternative to investing in physical gold in November 2015.

The aim of SGB is to reduce demand, including through imports, for physical gold, and in process reduce India’s Current Account Deficit.

The total subscription in first four tranches was Rs 2,239 crore corresponding to 7.85 tonne of gold. The highest mobilisation was Rs 921 crore in the fourth tranche when the issue price was Rs 3,119 per gram of gold.

The sustained and encouraging response of the investors indicates that the product has come of age, and is increasingly becoming popular due to advantages it offers over physical gold, namely used as collateral for loans, capital gain tax exemption on redemption, zero risk of theft/impurities associated with handling of physical gold; tradability through stock exchanges and also availability in demat and paper form.

The product, in addition, earns an interest rate of 2.75 per cent per annum, semi-annually payable on initial investment. (IANS)


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