Cabinet approves Sovereign Gold Bond scheme

The Union Cabinet on Wednesday approved the Sovereign Gold Bond scheme.

"The Cabinet today approved Sovereign Gold Bond Scheme. One can buy gold bonds instead of actual gold. The RBI will issue these bonds on behalf of the Government of India. Gold bonds will be issued in denominations of 5, 10, 50, 100 grams of gold. Its sale will be in the Indian entities," said Union Finance Minister Arun Jaitley.

"There will also be an interest on the bonds which will be decided by the government from time to time keeping the market rate in view. The period of these bonds will be a minimum of five to seven years so that the customers can be saved from the volatility of the prices of the gold prices," he added.

Jaitley further said a person can buy only 500 grams of bonds.

"Its redemption will be there in authorised agencies of the government like the post-offices and banks," he added.

The Cabinet also approved a hike of six percent in the Dearness Allowance (DA) for the government employees and pensioners in their basic pay.