The Indian Finance Ministry aims to raise nearly Rs 15,000 crore during the current fiscal through the proposed gold bond scheme. The Ministry hopes to get cabinet nod for the scheme later this month. However, the timing and final guidelines of the scheme would be decided by the Reserve Bank of India (RBI). Earlier in June this year, the Ministry had released a draft outline of the gold-linked bond scheme.
According to senior officials belonging to the Ministry, talks are being held with the RBI on interest rate to be offered to customers. The floor rate will be kept close to the rates on other government securities, he added. Initially, the scheme would not be linked to any government borrowing programme. However, if the scheme turns out to be a success, the Ministry may consider linking of the scheme to government’s borrowing programme.
The scheme would be issued in denominations of 2, 5, 10 grams and other sizes of gold. In order to protect the deposits from gold price volatility, the tenure of the bond will be fixed at minimum 5 to 7 years. Furthermore, the launch of the proposed scheme through various agencies such as post offices, brokers and agents will ensure widespread public access. Sources also indicate that the Ministry is currently analyzing the public comments on the proposal. The final guidelines of the scheme are expected to be announced during end-July.
Earlier, during the budget speech for Union Budget 2015-’16, the country’s Finance Minister Mr. Arun Jaitely had proposed launch of two new schemes- gold deposit scheme and gold-linked bond scheme. The gold deposit scheme is aimed to mobilize the idle gold lying with Indian households and institutions, whereas the sovereign gold bond scheme is being considered as an alternative to purchasing metal gold.
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