A new update has come from the government amid speculations about the closure of the Sovereign Gold Bond Scheme. The government says that the next installment of Sovereign Gold Bond will be decided according to the market. The government will bring a new installment of Sovereign Gold Bond only if there is demand in the market.
Decision will be taken according to the market
According to a report in Hindu Business Line, the government will assess the market conditions and needs before bringing the new tranche of Sovereign Gold Bond. In the report, a source in the Finance Ministry has been quoted as saying – This is not a social security scheme. Borrowing cost is highest in this. In such a situation, the market conditions and needs will be reviewed before bringing the new installment.
There are speculations about closing the scheme
This update from the government has come at a time when there are speculations about the closure of Sovereign Gold Bond since last month. Last month, CNBC TV18 had claimed in a report that the Indian government may discontinue the Sovereign Gold Bond. In the report, quoting government sources, it was said that the government is considering this scheme as expensive and complex. For this reason, closure of Sovereign Gold Bond is being considered.
The scheme was started in the year 2015
Sovereign Gold Bond was started in the year 2015. The government started this scheme mainly to control the import of gold. The Reserve Bank of India i.e. RBI issues sovereign gold bonds on behalf of the government. It has emerged as a preferred option for investors, especially those investing in gold. However, if it is discontinued now, the scheme will not be able to complete even 10 years of its inception.
Gold bond became popular due to these reasons
There are many reasons for the popularity of Sovereign Gold Bond for the investors. The value of SGB investment also increases according to the rise in market prices. Apart from that, investors earn 2.5 percent interest every year. The amount received on maturity of the gold bond is completely tax-free. Investors also get a discount of Rs 50 per gram on buying bonds online. It also removes the hassles like making charges, storage and adulteration etc. in case of physical gold.
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