Indian announces second tranche of sovereign gold bonds

India will issue the second tranche of sovereign gold bonds next week, as it strengthens its efforts to reduce physical trade of the metal in a country known for its gluttony for gold.

Applications for the bonds will be accepted from January 18 to January 22, a governmetn statement said, adding the bonds will be sold through banks, Stock Holding Corporation of India Limited and designated post offices.

The first tranche was opened for subscription last November, but the response was tepid.

The latest series will be issued bythe Reserve Bank of India and will be restricted for sale to to resident Indian entities including individuals, HUFs, trusts, Universities and charitable institutions, the statement said, adding that The tenor of the Bond will be for a period of 8 years with an exit option from 5th year to be exercised on the interest payment dates.

The investors will be compensated at a fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment.

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