In a strategic move, the Indian government has decided to substantially increase the issuance of Sovereign Gold Bonds (SGB) for the upcoming fiscal year. The allocation for SGBs has been more than doubled, rising from ₹1,500 crore in the financial year ending March 31, 2023, to a significant ₹3,500 crore for the fiscal year 2024-25.
The Sovereign Gold Bond, overseen by the Reserve Bank of India (RBI), has emerged as a preferred investment avenue, effectively channeling investor interest towards financial instruments rather than physical gold. This approach aids in curbing the current account deficit by controlling gold imports. Despite a 20% surge in gold imports to 781 tonnes last year, the success of SGBs in attracting financial investors has played a crucial role in managing gold demand amidst rising prices.
Somsundaram PR, Regional CEO (India) of the World Gold Council, highlights the success of SGBs in attracting a distinct group of financial investors seeking exposure to gold without the complications associated with physical ownership. The scheme has proven effective in diversifying investment avenues and reducing the impact on the physical domestic demand for gold, which still hovers between 700-750 tonnes annually.
The Reserve Bank of India redeemed the inaugural tranche of SGBs in November, marking a significant milestone. The initial tranche, issued at ₹2,684 per gram in November 2015, was redeemed at ₹6,132 per gram. Investors also benefited from an annual interest rate, initially set at 2.75% and later reduced to 2.50%.
The next issuance of Sovereign Gold Bonds is scheduled for subscription between February 12-16, offering investors an opportunity to participate in a financial instrument with a tenure of eight years and the option for premature redemption after the fifth year. The maximum subscription limit is set at 4 kg for individuals and 20 kg for trusts and similar entities per fiscal year, providing flexibility for a diverse range of investors.
International Museum Day, celebrated annually on May 18th in the world to raise public awareness…
India and the UK have reaffirmed their commitment to concluding a mutually beneficial Free Trade…
In the world of architectural marvels and historical extravagance, palaces have perennially served as iconic…
The Indian Space Research Organisation (ISRO) is gearing up for a landmark mission that aims…
India and the UAE recently concluded a significant meeting focused on the India-Middle East-Europe Economic…
Stadiums transcend their roles as mere sports venues; they embody iconic symbols of human achievement…