Govt to get Rs 726 crore via 2nd tranche of gold bond scheme

New Delhi: The government has received subscription for 2,790 kg gold amounting to Rs 726 crore under the second tranche of sovereign gold bond scheme, three times more than what it had received earlier.

"Second tranche of Gold Bond Scheme: About 3.16 lakh applications for 2,790 kgs gold involving subscription of Rs 726 crore received," Economic Affairs Secretary Shaktikanta Das tweeted.

The first tranche of the scheme, which was launched in November, had received a subscription for 915.95 kg of gold worth Rs 246 crore. As many as 62,169 applications had come for the first tranche.

"Second tranche of Gold Bonds: Outcome significantly better than first tranche. Scheme picking up," Das said in another tweet.

The second tranche of gold bond scheme, which opened for subscription on January 18, closed on January 22. The bonds would be alloted on February 8.

The gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.

In order to hard sell gold bonds, Finance Minister Arun Jaitley had earlier this month asked banks to make their best efforts to reach out to potential investors to invest in the second tranche of sovereign gold bonds.

Prime Minister Narendra Modi had on November 5 launched gold schemes to wean investors away from physical gold.

India imports about 1,000 tonnes of gold every year and the precious metal is the second-highest constituent of the import bill after crude oil.

The scheme is aimed at reducing demand for gold in physical form by encouraging people to buy the commodity in demat or the paper form.

During April-December this fiscal, gold imports increased to USD 26.45 billion as against USD 25.85 billion in the same period last year.

The government has fixed the rate of interest on gold bonds for the year 2015-16 as 2.75 percent per annum, payable on half yearly basis.

The Finance Ministry, in a statement, said the top 10 receiving agencies in terms of subscription amount are SBI, Indian Bank, Syndicate Bank, ICICI Bank, Bank of India, Punjab and Sind Bank, Andhra Bank, Canara Bank, PNB, and Central Bank of India.

"The trend during the second tranche of gold bonds shows that the scheme is gradually picking up amongst the investors with increase in awareness and more clarity about the provisions of the scheme," the statement added.

To increase the awareness amongst potential depositors about the scheme, the government had also launched the media campaign through AIR, FM radio, print, Mobile SMS, Facebook and Twitter.

"The objective of the scheme is to reduce the demand for physical gold and shift a part of the domestic savings used for purchase of gold into financial savings," it added.

The statement added the actual amount garnered through the scheme may vary as comprehensive information from all the authorised receiving agencies is under compilation.