Amid discussions of closing the Sovereign Gold Bond (SGB) scheme, the government has released a new update.
The government says that the decision on the next installment will be taken based on the market demand. Only if there is demand in the market, the government will bring a new installment of Sovereign Gold Bond.
Assessing market needs
According to a report, sources in the Ministry of Finance said that the government will deeply assess the market situation before bringing a new installment of Sovereign Gold Bond. This scheme is not a social security scheme and the borrowing cost in it is the highest. In such a situation, the market conditions and needs will be reviewed before bringing a new installment.
There is a possibility of the scheme being shut down
This information has come at a time when speculations were being made about closing the Sovereign Gold Bond since last month. According to media reports, the government is considering this scheme to be expensive and complicated, due to which it is considering closing it.
The scheme was started in 2015
Sovereign Gold Bond was introduced in the year 2015 with the main objective of controlling gold imports. The Reserve Bank of India (RBI) issues bonds under this scheme and it has become an attractive option for investors. However, if it is discontinued, the scheme will not even complete 10 years of its launch.
Reasons for the popularity of gold bonds
Market boom: When the price of gold in the market rises, the value of SGB investment also increases.
Interest: Investors get 2.5% interest every year.
Tax-free amount: The amount received on maturity is completely tax-free.
Online discount: There is a discount of Rs 50 per gram on buying bonds online.
Freedom from hassles: This scheme saves from problems like making charges, storage and adulteration of physical gold.
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