<h1 class="ql-align-center">Sovereign Gold Bond Scheme 2021-22 Series VI&nbsp;</h1> <h2>Context:</h2> <ul><li>The Reserve Bank of India (RBI) has announced the Sovereign Gold Bond Scheme&nbsp;2021-22 Series VI,&nbsp;which will be open for subscription for the period August 30-September 3, 2021.</li></ul> <h2>About:</h2> <ul><li>It was introduced by the Government in 2015 </li></ul> <ul><li>The government introduced these bonds to help reduce India’s over-dependence on gold imports.</li></ul> <ul><li>Bonds can be used as collateral for loans.</li></ul> <ul><li>The bonds will be restricted for sale to resident Indian entities, including individuals, Hindu Undivided Families (HUFs), trusts, universities, and charitable institutions</li></ul> <ul><li>The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor will be for a period of 8 years with an exit option from the 5th year to be exercised on the interest payment dates</li></ul> <ul><li>The minimum permissible investment limit will be 1 gram of gold, while the maximum limit will be 4 kg for individuals, 4 kg for Hindu Undivided Family, and 20 kg for trusts and similar entities per fiscal (April-March) notified by the government from time to time. In the case of joint holding, the investment limit of 4 kg will be applied to the first applicant only.</li></ul> <ul><li>The loan-to-value (LTV) ratio is to be set equal to the ordinary gold loan mandated by the Reserve Bank from time to time.</li></ul> <h2>Disadvantages:</h2> <ul><li>They are&nbsp;listed on an exchange but the trading volumes are not high,&nbsp;therefore it will be difficult to exit before maturity.</li></ul> <ul><li>This is a&nbsp;long-term investment, unlike physical gold which can be sold immediately.</li></ul>