28 Jan 2023
DiamondWorld Directory
Home |
Indian government plans to issue gold sovereign bonds
The bonds will help reduce demand for physical gold investment and control CAD
By: Diamond World News Service
Jun 20 2015 5:30PM
Reference: 11606  

The Indian government is contemplating issuing sovereign gold bonds linked to the price of gold, reports say. This initiative of the government is towards reducing demand for gold and control current account deficit, by creating an alternative to purchasing gold, reports say.

The outline draft of this initiative states that the sovereign gold bond scheme would shift part of the investment in gold, estimated at around 300 tonnes of physical bars and coins annually, to ‘demat’ gold bonds, reports say.

The Reserve Bank of India will issue the bonds on behalf of the Indian government. The bonds will be issued only to Indian residents. The issuing agency will pay distribution costs and a sales commission to the intermediate channels, to be reimbursed by the government, reports add.

The draft mentioned that the ‘cap on bonds that may be bought by an entity will be at a suitable level, not more than 500 grams per person per year’. The bonds will be issued in values of 2, 5, 10 grams of gold or other denominations; and for a minimum of 5-7 years to protect the investor from medium-term volatility in gold prices, reports add.

The government will issue bonds with a nominal rate of interest, which will be linked to international rate for gold borrowing as per the draft, reports say.

The draft mentioned that ‘an indicative lower limit of 2 per cent may be given, but the actual rate will have to be market determined. On maturity, the investor receives the equivalent of the face value of gold in rupee terms’. The rate of interest on the bonds will be payable in terms of grams of gold and the interest will be calculated on 10,000 at a certain per cent, say 2 per cent or 3 per cent, as per the draft, reports say.

Follow DiamondWorld on Instagram: @diamondworldnet
Follow DiamondWorld on Twitter: @diamondworldnet
Follow DiamondWorld on Facebook: @diamondworldnet
Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
*  Company:
*  Name:
*  Mobile:
*  Email:
Subscribe for DiamondWorld weekly Newsletter
Search News by City
Recent Issue
News in Pictures
Young Diamantaires
Pictures: 16
Stunning Jewellery from Cannes 2019
Pictures: 24
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 32385
Diamond World Expert Hour with Evgeny Agureev, Deputy CEO, ALROSA
Views: 10044
GJEPC Chairman Interview
Views: 28477
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 39932
Promo for IJ Awards 2012 at NDTV Profit
Views: 57518
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 69127
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 22153
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 51325
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 53633
Member of:
Supporter of: