Government mulls sovereign gold bond issue around Akshaya Tritiya
The government is planning to issue the fourth tranche of sovereign gold bonds around Akshaya Tritiya.
Why on this day?
Akshaya Tritiya, which falls on May 9 this year, is an important day for the bullion market as people consider buying gold on that day as auspicious. In the past two years, gold demand on this day stood at 25-30 tonnes. In 2013, around 50 tonnes of gold was estimated to have been sold on Akshay Tritiya.
Background:
The government has issued three tranche of sovereign gold bonds so far, with a total subscription of around 5,000 kg. Of this, the second tranche accounted for around 60%.
About Sovereign Gold Bond Scheme:
- Under the scheme, gold bonds are issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.
- The bonds will be sold through banks, Stock Holding Corporation of India Limited and designated post offices.
- As per the scheme, the gold bonds will be sold only to resident Indian entities including individuals, Hindu undivided families, trusts, universities, and charitable institutions.
- The bond tenure will be eight years with exit option beginning the fifth year onwards. They will also be tradable in the bourses.
- Bonds can also be used as collateral for loans.
