Sovereign Gold Bond Scheme:
The Reserve Bank of India (RBI) has announced the Sovereign Gold Bond Scheme 2021-22 Series VI, which will be open for subscription for the period August 30-September 3, 2021.
About the Sovereign Gold Bond Scheme:
- The sovereign gold bond was introduced by the Government in 2015.
- Government introduced these bonds to help reduce India’s over dependence on gold imports.
- The move was also aimed at changing the habits of Indians from saving in physical form of gold to a paper form with Sovereign backing.
- The bonds will be restricted for sale to resident Indian entities, including individuals, HUFs, trusts, universities and charitable institutions.
- The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor will be for a period of 8 years with exit option from the 5th year to be exercised on the interest payment dates.
- The minimum permissible investment limit will be 1 gram of gold, while the maximum limit will be 4 kg for individual, 4 kg for Hindu Undivided Family and 20 kg for trusts and similar entities per fiscal (April-March) notified by the government from time to time.
- In case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.
- Bonds can be used as collateral for loans.
- The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time.