Govt garners Rs.919 cr in fourth tranche of SGB scheme

The Dollar Business Bureau

Under the fourth tranche of the Sovereign Gold Bond (SGB) scheme, the government of India has collected Rs.919 crore, the highest ever realisation till date under the SGB scheme.

“The amount realised through the 4th tranche, at around Rs.919 crore, is the highest achieved as yet. The previous highest was Rs.746 crore in the 2nd tranche when the issue price was only Rs.2,600 per gram of gold. This was mobilised through over 1.95 lakh applications representing around 2.95 tonnes of gold,” a statement from the finance ministry said.

In the fourth tranche of the SGB scheme, the issue price was Rs.3,119 a gram of gold.

The given numbers are expected to go up as the applications submitted on the last date are still to be completely updated, said the statement.

The five major receiving offices were State Bank of India (SBI), National Stock Exchange (NSE), Bank of India (BoI), HDFC Bank and ICICI Bank. The overall subscription in the initial three tranches of the gold bond scheme was Rs.1,318 crore, equivalent to 4.9 tonnes of gold.

The finance ministry also said that in this financial year, it is planning to come up with more tranches of the SGB scheme, depending on the response from investors.

SGB scheme was proposed in the Budget of 2015-16 as an alternate to physical gold. The scheme was started in November last year with a purpose to cut physical demand for bullion via imports.

Since then, three tranches were floated during the financial year. The government launched the fourth tranche this year from July 18-22, in consultation with the Reserve Bank of India (RBI).

In order to encourage subscriptions, government reduced the minimum subscription limit this time to 1 gram from 2 gram.

In the 2016-17 Budget, it is provided that the capital gains tax emerging from the redemption of the SGB scheme is exempted for an individual.