SOVEREIGN GOLD BONDS Syllabus GS Paper 3 – Economy)

Context: Recently, there has been a notable surge in interest for Sovereign Gold Bonds (SGBs) following the maturity of the initial set of bonds.

Sovereign Gold Bonds (SGB)

• Introduced: In November 2015
• Issued by: Reserve Bank of India on behalf of the Government of India.
• Aim: 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.
• Eligibility: SGBs will be restricted for sale to resident individuals, HUFs (Hindu Undivided Family), Trusts, Universities and Charitable Institutions.
• Tenor: The tenor of the SGB will be for a period of eight years with an option of premature redemption after 5th year.
• Minimum size: The minimum permissible investment will be One gram of gold.
• Maximum limit: The maximum limit of subscription shall be 4 Kg for individuals, 4 Kg for HUF, and 20 Kg for trusts and similar entities per fiscal year (April-March) notified by the Government from time to time.
• Joint holder: In case of joint holding, the investment limit of 4 Kg will be applied to the first applicant only.