India’s Sovereign Gold Bonds Failed to Attract Investor Interest

SEATTLE (Scrap Monster): The Sovereign Gold Bond (SGB) scheme launched by the Indian government has failed to attract investment, contrary to the government’s expectations. The ambitious scheme launched in 2015 has been able to gather investments of only 28.6 tonnes so far.

The SGB was launched with the aim of converting gold into financial savings, thereby reducing the demand for physical gold. However, through 33 tranches announced so far over the past four years, the scheme has been able to account for even less than 1% of the total gold demand in the country. As per estimates, the yearly gold consumption in India is approximately 750 tonnes.

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Meantime, the next tranche of SGB will open for subscription from 13^th to 17^th, January 2020. The issue price of the bond is fixed at INR 3,795 per gram, which is comparatively less when compared with prevailing domestic gold market rate. Also, for online investors who make the payment through digital mode, an additional discount of INR 50 per gram will be offered.