Sovereign Gold Bonds scheme to discontinue: Reports
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New Delhi: The Central government will either reduce the implementation or do away with the Sovereign Gold Bonds (SGB) scheme, according to some media reports. The reason attributed to this decision is the government considers it too expensive.
Sovereign Gold Bonds (SGB) schemes are government securities denominated in grams of gold. The Union government introduced the Sovereign Gold Bonds (SGB) scheme in 2015 to reduce the demand for physical gold. Investors can buy these bonds through banks, designated post offices, SHCIL, NSE and BSE.
It is believed that the recent announcement on reducing the custom duties on gold and silver to 6 percent from existing 15 percent may impact the demands for SGB scheme. The reduction in custom duties witnessed the fall in SGB prices on the National Stock Exchange by 2-5 percent.
Under the SGB scheme, resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions are allowed to invest in gold in a digital format. The investment in these bonds have an eight-year tenure and the bonds will be redeemed in cash on maturity. The investors will be allowed to exit the scheme after the fifth year on interest payment dates.
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