Blog Written By:

Roopali Mall Vishen
Manager - Credit
Indian Bank

Being a banker, financial awareness is an issue that I am extremely passionate about. Thus it bothers me that most women in our country are dependent on the men in their families to take financial decisions for them. Whenever I spoke about managing personal finances to a female, the response I often heard was that “I will ask my husband/brother/father.” I believe that the 21st-century woman must take charge of her finances as well. Thus, I commenced my journey towards advocating financial literacy as part of women empowerment.

When it comes to women, yellow metal(gold) has been their all-time favourite. At times holding physical gold can be risky and even if we purchase Gold, for the most time of the year our gold is confined in the space of our lockers.

To avoid the difficulties of holding physical gold, to reduce the demand for physical gold and to shift a part of our domestic savings used for the purpose of gold into financial savings, we have a financial instrument called the SOVEREIGN GOLD BOND (SGB)

SGBs are govt securities denominated in grams of gold issued by RBI on behalf of GOI. The quantity of gold for which the investor pays is protected since he receives the ongoing market price at the time of redemption.

Investors get the market value of gold at the time of maturity and periodical interest.
SGB is free from issues like making charges and purity as in the case of gold in the form of jewellery. The bonds are held in the books of RBI or in format form. Persons resident in India are eligible for investment. The bonds are issued in denomination of 1g of gold and in multiples thereof. The maximum limit of subscription is 4kgs for an individual.

The bonds bear fixed interest at a rate of 2.50 percent per annum on the amount of initial investment which shall be credited semi-annually to the bank account of the investor.

Bonds are sold through branches of public sector banks, private banks, Stock Holding Corporation of India Ltd or through agents. One can apply online as well, upon which he/she will get Rs. 50 discount from the issue price.

The nominal value of a gold bond is in Indian Rupees fixed on the basis of a simple average of the closing price of gold of 999 purity, published by India Bullion and Jewellers Association Ltd.
The price of gold for the relevant tranche will be published on the RBI website two days before the issue opens. On maturity, the gold bonds shall be redeemed in Indian rupees and the redemption price is based on as published by IBJA Ltd.

The tenor of the bond is of 8 years and early redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. These bonds are traded on exchanges if held in Demat form and are also eligible as collateral for loans.

The Sovereign Gold Bond is being issued in 6 tranches from October 2020 to March 2021. The next upcoming tranches of SGB are SGB 2020-21 series IX between 28 December 2020 – 01 Jan 2021 to be issued on January 5, 2021, and SGB 2020-21 series X between 11-15 Jan 2021 to be issued on January 19, 2021.

What more can we women ask if our favourite metal starts giving us hassle-free returns…
#Happy learning #Financial Literacy #Women Empowerment.

This article features our Guest Writer and Financial Literacy evangelist Roopali Mall Vishen. Roopali is an engineer turned banker working in one of the leading public sector banks as a Manager – Credit. She is an avid reader and a strong supporter of financial literacy and financial freedom when it comes to women empowerment. Roopali is super passionate to learn more and add value to the life of people in the field of finance.

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