Sovereign Gold Bond 2023-24: Govt announces two more tranches; check dates, how to apply, payment modes, and more

The Reserve Bank of India (RBI) recently announced two tranches of the Sovereign Gold Bonds (SGB) scheme 2023-24. The SGB 2023-24 Series III will be open for subscription from December 18-22. The date of issuance for this SGB tranche is December 28. The second tranche of the Sovereign Gold Bonds scheme will be open for subscription from February 12-16, 2024 and will be issued on February 21, 2024.

The SGBs will be sold through scheduled commercial banks except small finance banks, payment banks and regional rural banks; Stock Holding Corporation of India Limited (SHCIL); Clearing Corporation of India (CCIL); designated post offices and stock exchanges – NSE and BSE. The SGBs will be denominated in multiples of gram(s) of gold with a basic unit of one gram.

Sovereign Gold Bond (SGB) scheme key dates

Tranche	Date of Subscription	Date of Issuance
2023-24 Series III	December 18-22, 2023	December 28, 2023
2023-24 Series IV	February 12-16, 2024	February 21, 2024

SGB 2023-24 interest rate, collateral for loans

The investors will receive an interest rate of 2.50 per cent per annum payable semi-annually on the nominal value. The SGBs can also be used as collateral for loans. The loan-to-value ratio will be applicable to any ordinary gold loan as mandated by the RBI from time to time.

Here’s how to apply for SGBs online

A customer can apply for Sovereign Gold Bonds (SGBs) online through the website of the listed scheduled commercial banks like State Bank of India (SBI), ICICI Bank, HDFC Bank, Punjab National Bank Bank of Baroda, Union Bank of India, and others. The issue price of gold bonds will be Rs 50 per gram lesser than the nominal value to those investors applying online and the payment against the application is made through digital modes.

KYC norms for SGBs

The know-your-customer (KYC) norms for SGBs are the same as that of purchase of physical gold. KYC documents such as voter ID, Aadhaar card/PAN or TAN/passport will be needed. Every application should be accompanied with the PAN Number issued by the Income Tax Department to individuals and other entities.

Eligibility to apply for SGBs 2023-24

Resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable universities are eligible to apply for this scheme.

Minimum, maximum limit of subscription permitted under SGBs

Minimum permissible subscription under this scheme is that of one gram of gold whereas the maximum permissible subscription limit varies as per the nature of the investor. The maximum subscription limit for individuals and HUF is 4 kg.

Trusts and similar entities can have a maximum subscription of 20 kg gold under this scheme as per fiscal year (April-March) notified by the Government of India from time to time. In case of joint holding, the investment limit of 4 kg wil be applicable to the first applicant only.

“A self-declaration to this effect will be obtained from the investors at the time of making an application for subscription. The annual ceiling will include SGBs subscribed under different tranches, and those purchased from the secondary market, during the fiscal year,” the Finance Ministry release read.

Payment mode for SGBs

Payment for the bonds can be done through cash for amount up to Rs 20,000 or demand draft or cheque or net banking.

When can one exit SGBs?

An investor can choose to exit SGBs after a minimum of 5 years. It, however, is tradable on the bourses if held in the demat form and can be traded if there is enough volume for the tranche. The price that an investor gets upon exiting an SGB via the bourses will depend on the prevailing market price of gold at that point in time and may also be decided by the trading pattern at the time, as per Colonel (Retd.) Sanjeev Govila, a Sebi-registered investment advisor (RIA) and CEO, Hum Fauji Initiatives, a financial planning firm.

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