Fact Check: Are SGB stopped?

Are Sovereign Gold Bonds Stopped?

The claim that Sovereign Gold Bonds (SGB) have been discontinued has emerged in various reports, suggesting that the Indian government has ceased the issuance of these bonds due to high borrowing costs. This article will explore the available evidence surrounding this claim, critically evaluating the sources and their reliability.

What We Know

1. Last Issuance: The Reserve Bank of India (RBI) last issued SGBs in February 2023, and reports indicate that no new bonds have been issued in the financial year following that date 24.

2. Government Statements: Finance Minister Nirmala Sitharaman has been quoted confirming that the SGB scheme will be discontinued, citing high costs associated with borrowing through this instrument 68. The official confirmation was reportedly made during a post-budget briefing on February 1, 2025 310.

3. Financial Impact: Since the inception of the SGB scheme in 2015, the total amount issued has reached Rs 45,243 crore, with an outstanding amount of Rs 4.5 lakh crore as of March 2023 24. The bonds were designed to provide an alternative to physical gold ownership, allowing investors to earn interest on their investments.

4. Future of Existing Bonds: Current SGB investors are expected to continue receiving the 2.50% annual interest until maturity, and there are provisions for premature withdrawal for bonds issued between May 2017 and March 2020 7.

5. Alternatives and Speculation: Some sources speculate about potential alternatives to the SGB scheme, indicating that the government may be considering other investment avenues for gold 10.

Analysis

Source Evaluation

• Wikipedia: The entry on Sovereign Gold Bonds provides a general overview but lacks citations for its claims about the discontinuation in 2024. Wikipedia can be a starting point but should not be relied upon for definitive statements without corroboration from primary sources 1.

• ET Now: This source has reported on the discontinuation and provides context about the last issuance of bonds. However, ET Now is a financial news outlet that may have a vested interest in sensationalizing financial news, which could introduce bias 24.

• Times Now: The articles from Times Now corroborate the claims made by ET Now and provide additional context regarding the government's rationale. However, Times Now has been criticized for sensationalism in the past, which may affect the reliability of its reporting 3.

• Moneycontrol: This source is generally considered reliable in financial reporting and corroborates the claims about the discontinuation of the SGB scheme due to high borrowing costs 6.

• PersonalFN and Stable Investor: These sources provide insights into the implications of the discontinuation for investors and potential alternatives. However, they may have a bias towards promoting investment products, which could affect their objectivity 710.

Methodology and Evidence

The claims regarding the discontinuation of SGBs are primarily based on statements from government officials and reports from financial news outlets. However, the lack of an official government press release or detailed documentation outlining the reasons for discontinuation raises questions about the robustness of the claims.

Additionally, while the financial implications of the SGB scheme's discontinuation are discussed, the evidence presented does not include a comprehensive analysis of the potential impacts on the gold market or investor behavior.

Conclusion

Verdict: True

The evidence supports the claim that the Sovereign Gold Bond scheme has been discontinued, as confirmed by statements from Finance Minister Nirmala Sitharaman and corroborated by multiple financial news outlets. The last issuance of SGBs occurred in February 2023, and the government has cited high borrowing costs as the primary reason for this decision.

However, it is important to note that while the scheme is discontinued, existing bondholders will continue to receive interest until maturity, and there are provisions for early withdrawal for certain bonds. The context of this decision suggests a shift in government policy regarding gold investments, but the specifics of any new alternatives remain speculative at this point.

Limitations in the available evidence include the absence of an official government press release detailing the discontinuation and its implications. This lack of formal documentation may lead to uncertainties regarding the full impact of this decision on the market and investors.

Readers are encouraged to critically evaluate information from multiple sources and remain aware of the evolving nature of financial policies and their implications.

Sources

1. Sovereign Gold Bond - Wikipedia
2. ET Now - Sovereign Gold Bonds Discontinued
3. Times Now - Why Modi Government Discontinued Sovereign Gold Bond
4. ET Now - Sovereign Gold Bond Scheme Discontinued
5. ClearTax - Sovereign Gold Bond 2024-2025
6. Moneycontrol - Centre Discontinues Sovereign Gold Bond Scheme
7. PersonalFN - Government Discontinued the Sovereign Gold Bond Scheme
8. StackWealth - Union Government Discontinues Sovereign Gold Bonds
9. Outlook Business - Govt Likely to Discontinue Sovereign Gold Bond Schemes
10. Stable Investor - End of Sovereign Gold Bonds