Government to introduce sovereign gold bonds (SGBs) scheme
Posted on: 20/Jun/2015 10:50:31 AM
In order to curb the demand for gold, the Central Government is planning to introduce gold bonds. The government has released the draft outline for the sovereign gold bonds (SGBs) scheme, which would offer interest rates in terms of grams of gold.
The bonds will be issued in denominations of two, five and 10 grams of gold or other denominations with a minimum tenor of five-seven years. The rate of interest will be linked to the international rate for gold borrowing, but would have 2% as the indicative lower limit.
On maturity, the investor will receive an amount which is equivalent to the face value of the gold prevailing at the time in rupee terms. SGBs will be restricted to resident Indians with an annual cap of 500 grams per person.
