The Reserve Bank of India (RBI) has announced the redemption price for premature exit of Sovereign Gold Bond (SGB) Scheme for the 2020-21 Series I.
Investors who want to opt for early redemption on April 28, 2025, will receive Rs 9,600 per unit of SGB.
According to an official release by RBI, holders of SGBs issued on April 28, 2020, are eligible for premature redemption after the fifth year from the issue date, coinciding with an interest payout date. Accordingly, April 28, 2025, marks the first window for such an early redemption for this tranche.
The redemption price is calculated based on the simple average of the closing gold price for 999 purity gold over the preceding three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA).
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For this cycle, the applicable business days were April 23. 24 and 25. Based on the data, the redemption price has been fixed at Rs 9,600 per unit of SGB.
The SGB scheme was launched to provide an alternative to buying physical gold, which had issues like quality and storage.
Investors could benefit from price appreciation without the hassle of storing the metal. SGBs also offered an annual rate of interest of 2.5 per cent per annum, paid on a semi-annual basis.
Investors looking to exit early will have their bonds redeemed at the announced price directly into their bank accounts linked to the SGBs. It is important to note that premature redemption is only permitted on interest payment dates after completing five years from the bond’s issue date.
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The RBI reiterated that the redemption process and pricing methodology are in line with previously laid out terms under the government’s notification and the operational guidelines of the SGB scheme.
For further details, investors should visit the RBI’s official website or contact the RBI's department of communication, the release said.
