Economics • Banking & FinanceMedium
What does 'Sovereign Gold Bond (SGB)' scheme, issued by the RBI on behalf of the Government of India, represent?
A. Physical gold coins distributed exclusively through rural post offices.
B. Government securities denominated in grams of gold, serving as a substitute for holding physical gold.✓ Correct Answer
C. Equity shares of government-owned gold mining companies listed on major stock exchanges.
D. Short-term promissory notes backed by foreign exchange gold reserves.
💡 Solution & Explanation
Sovereign Gold Bonds are government-backed financial instruments denominated in gold grams, allowing investors to hold gold securely without physical storage hassles while earning periodic interest. They eliminate the security risks and making charges associated with physical ornaments and bullion. Government monetary schemes are regular features in current affairs and economy sections.
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