Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 1.0
Article rating: No rating
RSS

News

Cabinet gives nod to changes in Sovereign Gold Bond scheme

Author: IANS/Thursday, July 27, 2017/Categories: Government

Cabinet gives nod to changes in Sovereign Gold Bond scheme

New Delhi - The Union cabinet on July 26 approved changes to the Sovereign Gold Bond (SGB) Scheme with a view to increasing its attractiveness for investors, an official said. "Flexibility has been given to Finance Ministry to design and introduce variants of SGBs with different interest rates and risk protection / pay-offs that would offer investment alternatives to different category of investors," the finance ministry added. 

The major change is in the gold investment limit per fiscal, which "has been increased to 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for trusts and similar entities notified by the government," it added. 

According to the government, the target mobilisation under the scheme was at Rs 15,000 crore in 2015-16 and at Rs 10,000 crore in 2016-17. 

"The amount so far credited in the government's account is Rs 4,769 crore," it said. 

SGBs are denominated in multiples of gram of gold with a minimum unit of 1 gram and maximum of 500 grams, which was the maximum amount permissible for subscription per person per fiscal year. 

Sovereign Gold Bonds can also be held in demat form for ease of trading.

To date, the government has issued eight tranches of SGBs mobilising 6,410 kg of gold. The second tranche of the SGB scheme opened for public subscription on July 10. The ministry announced the bonds would be issued on July 28, 2017. "The issue price of the gold bonds will be Rs 50 per gram less than the nominal value (of gold)," it said. The bonds would earn an interest of 2.50% per annum, payable every six months on initial investment.

The tenure of the bonds is for a period of eight years, with an exit option from the fifth year to be exercised on the interest payment dates.

The government said the bonds would be sold through banks, Post Offices, Stock Holding Corporation of India (SHCIL) and recognised stock exchanges -- National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Last month, the Reserve Bank of India said it had issued SGBs worth Rs 5,400 crore.

The government launched the Sovereign Gold Bond Scheme in November 2015 as an alternative to purchasing metal gold.

The scheme intends to reduce the demand for physical gold and mobilise the idle gold held by households and institutions in the country and to put this gold into productive use in the long run.

This will help reduce the current account deficit by reducing the country's reliance on the import of gold to meet the domestic demand.

Print Rate this article:
No rating

Number of views (279)/Comments (0)

S Vijaykrishnan
S Vijaykrishnan

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free