RBI's Latest Gold Bond Scheme Witnessed Record Investment

SEATTLE (Scrap Monster): The fifth tranche of Sovereign Gold Bond (SGB) scheme for 2020-’21, which was open for subscription from August 3^rd to 7^th, reported record subscription. The gold bonds subscription was by far the highest in the history of SGBs by the Reserve Bank of India (RBI).

The most recently concluded gold bond series recorded subscription of INR 3,387 crore. By volume, this equates to nearly 6.35 tonnes of the yellow metal. The bonds issued since 2015 totalled around 48.16 tonnes, said official data.

The higher subscription is despite the elevated issue price, which was INR 5,334 per gram, almost higher by 10% when compared with the issue price of the series prior to it. Also, digital purchases were offered a discount of INR 50 per gram.

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Surendra Mehta, national secretary, India Bullion and Jewellers Association Ltd. (IBJA) noted that the high subscription rate signals rising investment demand for gold among Indian households, despite nearly 25% surge in gold prices since the beginning of the current year. At the same time, the demand for physical gold in the country has been on the decline during recent months, he added.

The gold bond scheme is part of the government’s market borrowing programme and is aimed at reducing the country’s dependence on gold imports.