Government launches Sovereign Gold Bond Scheme 2018 -19: Important Information & FAQs

Oct 9, 2018 14:33 IST
Government launches Sovereign Gold Bond Scheme 2018 -19

The Union Government, in consultation with the Reserve Bank of India (RBI), on October 8, 2018 decided to issue Sovereign Gold Bonds 2018-19.

The Sovereign Gold Bonds will be issued every month from October 2018 to February 2019 through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, and recognised stock exchanges such as the National Stock Exchange and Bombay Stock Exchange.

S. No.


Date of Issuance


2018-19 Series II

October 23, 2018


2018-19 Series III

November 13, 2018


2018-19 Series IV

January 01, 2019


2018-19 Series V

January 22, 2019


2018-19 Series VI

February 12, 2019

Sovereign Gold Bond Scheme 2018 -19: Important Information


The Bonds will be issued by Reserve Bank India on behalf of the Government of India.


The Bonds will be restricted for sale to resident entities including individuals, HUFs, Trusts, Universities and Charitable Institutions.


The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram.


The tenure of the Bond will be for a period of 8 years with exit option in 5th, 6th year and 7th year to be exercised on the interest payment dates.

Minimum size

Minimum permissible investment will be 1 gram of gold.

Maximum limit

The maximum limit of investment shall be 4 kg for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities in a year (April-March). The annual ceiling will include bonds subscribed under different tranches during initial issuance by Government and those purchased from the Secondary Market.

Joint holder

In case of joint holding, the investment limit of 4 KG will be applied to the first applicant only.

Issue price

Price of Bond will be fixed in Rupees on the basis of simple average of closing price of gold of 999 purity, published by the India Bullion and Jewellers Association Limited for the last 3 working days of the week preceding the subscription period. The issue price of the Gold Bonds will be Rs 50 per gram less for those who subscribe online and pay through digital mode.

Payment option

Payment for the Bonds will be through cash payment (up to a maximum of Rs 20000) or demand draft or cheque or electronic banking.

Issuance form

The Gold Bonds will be issued as Government of India Stock under GS Act, 2006. The investors will be issued a Holding Certificate for the same. The Bonds are eligible for conversion into demat form.

Redemption price

The redemption price will be in Indian Rupees based on previous 3 working days simple average of closing price of gold of 999 purity published by IBJA.

Sales channel

Bonds will be sold through banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices, National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.

Interest rate

The investors will be compensated at a fixed rate of 2.50 percent per annum, payable semi-annually on the nominal value.


Bonds can be used as collateral or security for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. The loan against SGBs would be subject to decision of the lending bank/institution and cannot be decided by the bond holder.

KYC documentation

Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be required. Every application must be accompanied by the PAN Number.

Tax treatment

The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961). The capital gains tax arising on redemption of SGB to an individual has been exempted.

Trading of bonds

Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date.

Statutory Liquidity Ratio eligibility

Bonds acquired by the banks through the process of invoking lien or pledge alone shall be counted towards Statutory Liquidity Ratio.


Commission for distribution of the bond shall be paid at the rate Rupee one per hundred Rupees of the total subscription received by the receiving offices and receiving offices shall share at least 50 paise per Rs 100 of the commission so received with the agents or sub agents.

Sovereign Gold Bonds: Frequently Asked Questions (FAQs)

What is Sovereign Gold Bond (SGB)?

The Sovereign Gold Bonds are government securities denominated in grams of gold. They are substitutes for holding physical gold. One need to pay the issue price in cash for purchasing the bonds and the bonds can be redeemed in cash on maturity.

Who issues the bond?

The Bond is issued by the Reserve Bank of India on behalf of the Union Government.

Who is eligible to invest in the Sovereign Gold Bonds?

Persons resident in India as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions.

Can a Minor invest in SGB?

Yes, a minor can invest in SGB. The application on behalf of the minor has to be made by his or her guardian.

Can each member of a family buy 4 Kg of bonds in their own name?

Yes, each family member can buy the bonds, if they satisfy the eligibility criteria.

Can one apply online for investment in bonds?

Yes, a customer can apply online through the website of the listed scheduled commercial banks.

Can the bonds be gifted to a relative or friend?

The bonds can be gifted or transferred to a relative or a friend who fulfills the eligibility criteria. The Bonds shall be transferable in accordance with the provisions of the Government Securities Act, 2006 and the Government Securities Regulations, 2007.

What is the procedure to be followed after sudden demise of an investor?

The nominee to the bond may approach the respective Receiving Office with their claim. The claim of the nominee will be recognised in terms of the provision of the Government Securities Act, 2006 read with Chapter III of Government Securities Regulation, 2007. In the absence of nomination, claim of the administrators of the deceased holder or claim of the holder of the succession certificate may be submitted to the Receiving Offices.


Video: Check out the latest current affairs of this week


Is this article important for exams ? Yes1 Person Agreed

Register to get FREE updates

    All Fields Mandatory
  • (Ex:9123456789)
  • Please Select Your Interest
  • Please specify

  • ajax-loader
  • A verifcation code has been sent to
    your mobile number

    Please enter the verification code below

This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK