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Pratibha Rathore
Mumbai, April 5: Bank of India (BoI) has structured a gold bond scheme that is designed to offer twin products, savings as well as fixed deposit accounts. This will provide maximum liquidity to the bond holders. BoI has submitted its scheme to the Reserve Bank of India and is currently awaiting approval from the bank.
Talking to The Financial Express, BoI officials said that the scheme will offer investors a wide range of options with varying maturity period.
According to bank officials, the savings account will offer liquidity and flexibility to bond holders. "The scheme will allow depositors option to opt for either a saving or a fixed deposit instrument," sources said.
The fixed deposit scheme will have maturity slab ranging from six months to seven years while the savings account will offer flexibility in terms of time period and liquidity. The interest rate on the yellow metal is expected to be in the range of 2 to 4 per cent.
Banking sources are of the view that the interest rates onsaving account will be slightly lower than the FDs. However, the saving account will attract depositors owing to the high level of flexibility and liquidity.
At present a handful of gold deposit schemes have been awaiting the RBI clearance.
The State Bank of India and Corporation Bank too have submitted their schemes to the Reserve Bank. The SBI gold bond scheme will consist of a transferrable fixed deposit scheme which will offer rupee loans up to 90 per cent of the gold deposited into the scheme by deposit holders. The interest on this loan will be linked to prime lending rate (PLR).
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
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