Q. Consider the following statements with reference to the Sovereign Gold Bond (SGB) scheme
Which of the statements given above is/are correct?
Q. Consider the following statements with reference to the Sovereign Gold Bond (SGB) scheme
Which of the statements given above is/are correct?
The correct option is A 1 only
Explanation:
Statement 1 is correct: SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash. The Bond is issued by the Reserve Bank on behalf of the Government of India. According to RBI, residents in India, as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, and charitable institutions.
Statement 2 is incorrect: On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on a simple average of the closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewellers Association Limited.
Explanation:
Statement 1 is correct: SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash. The Bond is issued by the Reserve Bank on behalf of the Government of India. According to RBI, residents in India, as defined under Foreign Exchange Management Act, 1999 are eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities, and charitable institutions.
Statement 2 is incorrect: On maturity, the Gold Bonds shall be redeemed in Indian Rupees and the redemption price shall be based on a simple average of the closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewellers Association Limited.
