'Complex and expensive': Further tranches of sovereign gold bonds unlikely

The July Budget reduced the import duty on gold from 15 per cent to 6 per cent, lowering input costs for jewellers and deterring smugglers

The Union government is unlikely to issue further trances of sovereign gold bonds (SGBs), because they are now viewed as a “complex and expensive instrument,” according to a senior government official.

Earlier this month, the Reserve Bank announced the redemption price of a SGB scheme (SGB 2016-17 Series I — issue date August 5, 2016) at Rs 6,938 for gold of the 999 purity (of one gram). This was 122 per cent higher than the issue price of Rs 3119 in August 2016.
 

Despite this appreciation, the redemption price was about 4.5 per cent lower than the average