Gold bond scheme: 2nd window opens on Jan 18https://indianexpress.com/article/business/business-others/gold-bond-scheme-2nd-window-opens-on-jan-18/

Gold bond scheme: 2nd window opens on Jan 18

Finance minister Arun Jaitley on Thursday asked the heads of banks to reach out to potential investors to invest in the gold bonds as these are attractive investments, according to the statement.

The government will launch a second tranche of sovereign gold bond scheme that will be available for public subscription from January 18-22, the finance ministry said in a statement on Thursday. The bonds will carry an interest rate of 2.75 per cent per annum for the year 2015-16, payable on a half-yearly basis and will be available both in demat and paper form.

Finance minister Arun Jaitley on Thursday asked the heads of banks to reach out to potential investors to invest in the gold bonds as these are attractive investments, according to the statement.

Jaitley discussed banks’ preparedness for the launch of the scheme through a video conferencing with the bankers. He said that the government is keen to expand the scheme in the subsequent tranches as well.

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The Gold Bond scheme has an annual cap of 500 grams per person and such bonds will be issued for 5-7 years. Minimum permissible investment in these bonds is 2 grams of gold to be paid in rupees.

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“The main objectives of the scheme is to reduce the demand for physical gold and shift a part of the gold imported every year for investment purposes into financial savings through Gold Bonds,” the finance ministry said.

India imports about 1,000 tonnes of gold every year and the precious metal is the second-highest component of the imports bill after crude oil. During April-November this fiscal, gold imports have declined to $22.65 billion from $24.49 billion in the same period last year.

“To increase awareness among depositors, the government is continuing with the media campaign on AIR and FM radio, in print media and through mobile SMS campaign,” the finance ministry said.

To make these bonds attractive, the government is providing investors with exemption from capital gains tax on redemption. On maturity, the investor will get the equivalent rupee value of the quantum of gold invested at the then prevailing price of gold.

Up to Rs 20,000 payment can be made in cash to purchase these bonds. Purchase of above Rs 20,000 is allowed through cheque and electronic payment.

Sovereign Gold Bonds are issued by the RBI on behalf of the Central government on payment of the required amount in rupees and are denominated in grams of gold.

RBI on Thursday notified the opening of the second tranche of the gold bond scheme on January 18. As per the notification, applications for the bonds will be accepted by banks, post offices and the Stock Holding Corporation of India Ltd. These bonds will be issued on February 8, 2016.

Prime Minister Narendra Modi had on November 5 launched gold schemes to wean investors away from holding physical gold. The first tranche of the scheme, which was launched in November 2015, had got a subscription for 915.95 kg gold amounting to Rs 246 crore.

Reach out to investors: jaitley tells bankers

Finance minister Arun Jaitley on Thursday asked the heads of banks to reach out to potential investors to invest in the gold bonds as these are attractive investments, as per the statement.

Jaitley discussed banks’ preparedness for the launch through a video conferencing with the bankers. He said that the government is keen to expand the scheme in the subsequent tranches as well.

India imports about 1,000 tonnes of gold every year and the precious metal is the second-highest component of the imports bill after crude oil. During April-November this fiscal, gold imports have declined to $22.65 billion from $24.49 billion in the same period last year.

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Sovereign Gold Bonds are issued by the RBI on behalf of the Central government on payment of the required amount in rupees.