Economics • Banking & FinanceEasy
What does 'Sovereign Gold Bond (SGB)' scheme, issued by RBI on behalf of the Government of India, primarily aim to achieve?
A. To substitute physical gold demand with paper/digital gold instruments and mobilize household savings.✓ Correct Answer
B. To finance foreign trade deficits through gold bullion exports.
C. To provide direct foreign institutional investment into domestic bullion markets.
D. To regulate jewelry retail prices across major commercial hubs.
💡 Solution & Explanation
The Sovereign Gold Bond scheme was introduced by the Reserve Bank of India on behalf of the central government to provide an alternative to purchasing physical gold, thereby mobilizing domestic household savings into financial channels and easing the current account deficit caused by massive bullion imports. Investors receive fixed interest along with capital appreciation linked to market gold prices.
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