SGB से हाथ पीछे खींच रहे सरकार और RBI? Investors अब गोल्ड में कैसे लगाएंगे पैसा?

Summary

The video discusses the uncertain future of India's Sovereign Gold Bond (SGB) scheme, which was initially launched to reduce gold imports. While the scheme provided lucrative returns in the past, recent policy changes, such as reducing import duties on gold, have diminished its purpose. The government is now facing higher costs for issuing new bonds, and as a result, the number of new SGB tranches has significantly decreased. Investors may need to explore alternatives like Gold Mutual Funds or Gold ETFs, with the latter requiring a demat account, as the future of the SGB scheme remains uncertain.

Takeaways

• 😀 The Reserve Bank of India (RBI) has not launched any new series of Sovereign Gold Bonds (SGB) for a long time, despite demand from investors.
• 😀 In Financial Year 2021, RBI launched 12 tranches of SGB, but since then, the frequency has significantly dropped.
• 😀 The government's initial aim with the SGB scheme was to curb rising gold imports by encouraging domestic investments in gold bonds.
• 😀 The government reduced the import duty on gold from 15% to 6%, signaling that businesses and institutions can now import gold more freely.
• 😀 This reduction in import duty has made physical gold more attractive compared to SGB, leading to speculation that the SGB scheme might be phased out.
• 😀 Officials from the Ministry of Finance stated that raising funds through SGB is now an expensive option due to high costs associated with it.
• 😀 SGB is not a social security scheme, and new issuances will only happen if they are profitable for both the government and the investors.
• 😀 SGB's returns have been substantial, with returns from the 2016 tranche of approximately 159% over 8 years, and annual interest paid at 2.5%.
• 😀 Despite good returns, fewer SGB tranches have been issued recently: only 4 in FY 2024 and none so far in FY 2025.
• 😀 Investors are increasingly turning to physical gold as an alternative, as the government seems less inclined to continue issuing SGB.
• 😀 For those still interested in gold investments, alternatives like gold mutual funds or gold ETFs (Exchange-Traded Funds) are now recommended. Gold ETFs require a Demat account, while gold mutual funds do not.

Q & A

Why has the Reserve Bank of India (RBI) not launched a new series of Sovereign Gold Bonds (SGB) recently?

The main reason for the delay in launching new series of Sovereign Gold Bonds is that the RBI has not released any new series in a long time. Additionally, the government has recently reduced the import duty on gold, making physical gold more attractive than investing in gold bonds, leading to a drop in demand for new SGB series.

What was the purpose behind launching the Sovereign Gold Bond scheme?

The Sovereign Gold Bond scheme was introduced to curb the growing imports of gold into the country. By encouraging investment in gold bonds instead of physical gold, the government aimed to reduce the economic burden caused by gold imports.

How has the reduction in gold import duties affected the Sovereign Gold Bond scheme?

The reduction in gold import duties from 15% to 6% has made physical gold more attractive as an investment option compared to gold bonds. This has weakened the demand for Sovereign Gold Bonds and could lead to the eventual phasing out of the scheme.

What challenges are faced by the government in continuing the SGB scheme?

One of the main challenges is that raising funds through Sovereign Gold Bonds has become an expensive option. The financial aspect of issuing these bonds is proving to be costly for the government. Additionally, the scheme is not linked to social security, and the government has to ensure that both investors and the state benefit from its continuation.

How much return did investors receive from the Sovereign Gold Bonds issued in 2016?

Investors in the 2016 Sovereign Gold Bond series received a return of approximately 159% over 8 years, with the price of gold rising from ₹3,377 per gram in 2016 to ₹7,788 per gram at the time of maturity in November 2024. Including annual interest payments, the total return over this period was about 180%.

Why has the frequency of Sovereign Gold Bond issues decreased in recent years?

The frequency of Sovereign Gold Bond issues has decreased due to the increasing cost of raising funds through these bonds. In the 2021 financial year, there were 12 issuances, but in the 2024 financial year, this number has reduced to only four. In the current financial year (2025), no new issues have been launched so far.

What alternative investment options are recommended for those interested in investing in gold now?

For individuals like Gaurav, who are looking to invest in gold but can no longer rely on the Sovereign Gold Bond scheme, alternatives such as Gold Mutual Funds and Gold ETFs are recommended. These options do not require a demat account for mutual funds but do require one for ETFs.

How does the interest rate on Sovereign Gold Bonds compare to other investment options?

Sovereign Gold Bonds offer an annual interest rate of 2.5% paid on a semi-annual basis. While this interest rate is competitive compared to some fixed-income options, the increasing cost of issuing these bonds has made them less attractive for the government, particularly in comparison to the reduced import duties on gold.

What role does the secondary market play in the current Sovereign Gold Bond situation?

The secondary market has seen a rise in demand for Sovereign Gold Bonds, particularly as there are fewer new issues. As the prospects of new bond series diminish, investors are turning to the secondary market to buy existing bonds, reflecting the growing realization that new issuances are unlikely to come soon.

What has been the impact of gold price fluctuations on the attractiveness of Sovereign Gold Bonds?

The price of gold has nearly doubled in the past 8 years, making the Sovereign Gold Bonds issued in 2016 highly profitable. However, this increase in gold prices has also made physical gold more attractive to investors, thus reducing the demand for gold bonds. The government’s difficulty in issuing bonds at a competitive cost has further exacerbated this issue.