New Delhi: The central government is unlikely to further issue tranches of Sovereign Gold Bonds (SGBs), media reports said on Thursday. SGBs are government securities denominated in grams of gold and are substitutes for holding physical gold.
CNBC-TV18 and Business Today reported that the government is not keen on issuing Sovereign Gold Bonds as it’s an ‘expensive and complex’ instrument. Sovereign Gold Bonds were introduced by the Modi government in 2015 with an aim to curb the surging imports of the yellow metal at the time.
The government opened the subscription for Sovereign Gold Bonds 2023-24 (Series IV) from February 12-16, 2024 with Settlement date February 21, 2024. The issue price of the Bond was fixed Rs 6,263 per gram. After consulting the Reserve Bank of India (RBI), the government provided a discount of Rs 50 per gram from the issue price to those investors who apply online and the payment was made through digital mode. For investors opting for online mode, the issue price of Gold Bond was Rs 6,213.
Business Today reported that the government has to pay investors Rs 85,000 crore. It was a little less than Rs 10,000 crore at the end of March 2020.
The Indian residents as defined under Foreign Exchange Management Act, 1999 are eligible to apply for SGB. The government-controlled scheme ensures the quantity of gold for which the investor pays is protected and investors are assured of the market value of gold at the time of maturity and periodical interest. SGB also comes with advantages like no making charges are applicable and purity in the case of gold in jewellery form.
The government issues the Bonds in denominations of one gram of gold and in multiples thereof. Minimum investment is one gram with a maximum limit of subscription of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts.
The Sovereign Gold Bond scheme was launched in 2015 to curb gold imports. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
