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Govt to issue series IV sovereign gold bond scheme on 17 March

LiveMint logoLiveMint 24-02-2017 Sahib Sharma

Mumbai: The government is set to issue series IV sovereign gold bond scheme on 17 March.

The tenure of the bond will be for a period of eight years with an exit option from the fifth year to be exercised on the interest payment dates. An individual can minimum invest one gram in the scheme per fiscal year while maximum limit according to the scheme is set at 500 grams for the same period.

The bonds will give an interest at the rate of 2.5% per annum paid twice a year on the initial value of the investment.

Investments in such bonds will be counted in the calculation of statutory liquidity ratio (SLR) purpose from bank point of view.

For distribution of the bonds, commission shall be paid at 1% of the total subscription received by the receiving offices. Receiving offices shall further share minimum 50% of the commission received with the agents or sub-agents for the business procured through them.

A little over Rs250 crore was received by the government as subscription in the first tranche. But the subscription rose in the second tranche to Rs726 crore because the price of the bond was set higher than the price of physical gold at that time.

Given that investments during March are largely driven by tax planning, the subscription at the third tranche that opened between 8 March and 14 March was lower at Rs329 crore.

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