By Andrew Topf
The Indian government's plan to incent households to hand their gold over to banks in return for interest payments appears to be working.
According to The Indian Express, the government collected 919 crore (USD137.8 million) during the fourth tranche of its Sovereign Gold Bond program, rolled out in November 2015.
“The amount realised through the 4th tranche, at around Rs 919 crore, is the highest achieved as yet. The previous highest was Rs 746 crore in the 2nd tranche when the issue price was only Rs 2,600 per gram of gold. This was mobilised through over 1.95 lakh applications representing around 2.95 tonnes of gold,” a finance ministry statement said.
The first three tranches of the Sovereign Gold Bond program raised 1,318 crore (USD197.6 million). The fourth tranche was launched July 18-22, in consultation with the Reserve Bank of India.
Under the plan, people who own physical gold will be allowed to put their metal into banks and earn interest until it is withdrawn. The idea is to mobilize the thousands of tonnes of gold estimated to be sitting idle in Indian households.
India is the world's top consumer of bullion, with many Indians placing high value on the precious metal as jewelry, often given as a gift, and as a store of value.