Mumbai: India will issue sovereign gold bonds from April onward offering an annual interest rate of 2.50% to domestic investors, a government statement said on Monday.
The bonds will be issued in six tranches until September, and will be sold through banks and designated post offices as part of the government’s market-borrowing programme.
The bonds will have a tenor of eight years but investors will have the option to exit after the fifth year.
India’s gold imports have plunged more than 73% year-on-year in March as record prices and the lockdown related to coronavirus squeezed retail demand.
The minimum investment limit for Sovereign Gold Bond is 1 gram of gold, while the maximum limit of subscription is 4 kg for individual, 4 kg for HUF and 20 kg for trusts and similar entities, as notified by the government from time to time.
Over the years, the market has witnessed a considerable decline in the demand for physical gold. Sovereign gold bonds not only tracks the import-export value of the asset but also ensures transparency at the same time.