Over 12 trillion and passion! What federal government owes to Sovereign Gold Bond owners

The Indian federal government will certainly need to pay the Sovereign Gold Bond financiers a whooping 12,06,92,00,00,000 ( 12 trillion) if it were to retrieve all superior gold bonds, provided the gold price of 9,284 per gram since April 1. And this quantity does not consist of the passion payment on the gold bonds.

The federal government, in a written respond to the Parliament, has actually claimed that “the outstanding value as on March 20, 2025 on issue price is ₹67,322 crore for 130 tonnes of gold.” Redemption of SGBs is based upon the dominating market value.

So much, the federal government has actually currently totally retrieved 7 tranches ofSovereign Gold Bonds It lately provided to too soon pay the cash to SGB clients of the 8th tranche.

It might be remembered, previously this year, the federal government had actually stopped the Sovereign Gold Bond plan because of high loaning price.

Full redemption total up to be paid at the same time?

The federal government will certainly not need to spend the cash for all the SGBs at one go, due to the fact that each tranche will certainly have its very own maturation day. The last tranche of the SGB will certainly be up for redemption in 2032.

Sovereign Gold Bonds were offered in various tranches and included a period of 8 years. On maturation financiers would certainly obtain the dominating market value of the gold they had actually gotten in addition to a routine passion. SGBs provided a rates of interest of 2.50 percent per year on the quantity of first financial investment which is attributed semi-annually to the savings account of the capitalist.

Tax Benefits

While the passion made on SGB is taxed, if a specific capitalist holds SGBs till maturation (8 years), the resources gains on redemption are tax-free.

That being claimed, gold costs have actually been escalating for months currently. If they remain to rally like existing, and if SGB financiers prepare to hold their financial investments till maturation, the federal government will certainly need to spend a much greater quantity.

Since the issuance of the initial tranche of SGB in 2015, gold costs have actually rallied 252 percent. The federal government needed to pay a 128 percent costs to SGB financiers of the initial tranche without passion. With passion, the costs rose to 148 percent.

What did the govt inform Parliament on SGBs?

The federal government has actually provided a total amount of 67 tranches of Sovereign Gold Bonds (SGBs) totaling up to 146.96 tonnes of gold till 2024-25, Parliament was educated on Tuesday.

The superior worth as on March 20, 2025, on problem rate is 67,322 crore for 130 tonnes of gold, Minister of State for Finance Pankaj Chaudhary claimed in a written reply.

The federal government has actually kept a Gold Reserve Fund (GRF) in the Public Account where the rate and passion differential quantity is attributed in time, he claimed.

The SGBs, along with various other loaning tools, have actually been a tool for increasing sources for funding monetary deficiency, he claimed. However, along with these, SGBs additionally satisfied of savings/financial tools as an option to physical gold, he claimed.

Due to the current gold rate volatility and worldwide financial headwinds, this type of loaning has actually come to be reasonably costly.

“Therefore, based on maturing and deepening of Indian G-Sec market, which helped in mobilising relatively low-cost borrowing, resources were not raised through SGBs in FY 2024-25,” he claimed.