The Highlights of Sovereign Gold Bonds Scheme

Abstract

A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period at a variable or fixed interest rate. A written and signed promise to pay a certain sum of money on a certain date, or on fulfilment of a special condition Bonds are used by companies, municipalities, states and governments to raise money and finance a variety of projects and activities. Owners of bonds are debt holders, or creditors, of the issuer. Sovereign Gold Bonds have been issued by the Government of India as an alternative to the precious metal, and the borrowing through issuance of the bond will form part of market borrowing programmed of the government. The bonds will be tradable in the bourses. The purpose of this paper is to study the concept of sovereign gold bonds scheme and to highlight the features.