The first tranche of the SGB (SGB 2015-I) was launched on November 5 and was open for subscription until November 20, 2015. It was issued on November 30, 2015.
The SGBs will be redeemed after eight years from the date of issue. The redemption price is determined based on the average closing price of gold with 999 purity during the week prior to the redemption date, as published by the India Bullion and Jewellers Association Ltd. (IBJA).
On the other hand, the issue price of SGBs is based on the average closing price of gold with 999 purity during the three working days prior to the subscription period. The RBI determines the price using the prices published by IBJA.
In the current financial year, the RBI issued SGBs in two tranches on behalf of the Government of India. The first tranche was available for subscription in June at an issue price of Rs 5,926 per gram, while the second tranche was open for subscription in September at an issue price of Rs 5,923 per gram. SGBs can only be sold to resident individuals, HUFs, Trusts, Universities, and Charitable Institutions. They are denominated in multiples of grams of gold, with one gram as the basic unit. Although the tenor of the SGB is 8 years, investors have the option to redeem it prematurely after the 5th year. The minimum investment allowed is one gram of gold, and the maximum subscription limit is 4 Kg for individuals, 4 Kg for HUFs, and 20 Kg for trusts and similar entities per fiscal year (April-March).
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