Views of Mr. Hareesh V, Research Head, Geofin Comtrade Ltd. on 'Cabinet's approval on Gold monetization and Sovereign Gold Bond Scheme':
India's cabinet approved the Gold monetization and Sovereign Gold Bond Schemes today which were earlier proposed by the Finance Minister Mr. Arun Jaitley. The prime objective of these plans is to curtail gold import into the country.
The gold monetization scheme is aimed to mobilize the surplus gold holdings held with Indian households and institutions as deposits. Under the scheme, gold lying idle with people can be deposited in banks and generate interest. The return from these deposits is totally tax free. The deposited gold will be melted and make available for jewelers as raw material so as to restrict the increased dependence of imported gold.
In sovereign gold bond scheme, instead of buying gold in physical form investors can park their money in Bonds which are backed by gold. The bond has more or equal advantage against the physical gold. The Bonds will be issued on payment of money and would be linked to gold prices. The bonds will be issued by RBI on behalf of the Government of India. It is restricted for Indian entities and the maximum allowable limit is 500 grams per person per year. The government will issue bonds with an appropriate rate of interest and which shall be payable in terms of grams of gold. Banks/NBFCs/Post offices may be authorized to transact on these bonds on behalf of the Government for a fee. The bonds will be available in various denominations and the minimum tenor of the band could be around 5 to 7 years.
Shares of GEOJIT BNP PARIBAS FINANCIAL SERVICES LTD. was last trading in BSE at Rs.36.75 as compared to the previous close of Rs. 36.3. The total number of shares traded during the day was 12964 in over 161 trades.
The stock hit an intraday high of Rs. 38.95 and intraday low of 36.75. The net turnover during the day was Rs. 486822.