Now Reading: RBI sets SGB premature redemption at ₹14,957 per unit from August 11
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RBI sets SGB premature redemption at ₹14,957 per unit from August 11
The Reserve Bank of India has announced that premature redemption of Sovereign Gold Bond (SGB) 2019-20 Series IX and 2020-21 Series V will be permitted from August 11, 2026, as the five-year…
The Story in Brief
The Reserve Bank of India has announced that premature redemption of Sovereign Gold Bond (SGB) 2019-20 Series IX and 2020-21 Series V will be permitted from August 11, 2026, as the five-year lock-in period ends on that date. The redemption price is set at ₹14,957 per unit, based on the simple average of 999 purity gold closing prices on August 6, 7, and 10, 2026, as published by the India Bullion and Jewellers Association (IBJA). The scheme allows premature exit after the fifth year from the date of issue on interest payment dates.
Both SGB series were issued by the Government of India under notifications dated September 30, 2019, and April 13, 2020, respectively. The redemption price uses the simple average of three trading days' closing gold prices, not the spot price on the redemption date itself. Investors holding these bonds can tender them for early redemption at this fixed price through their designated banks or post offices.
The Indian Opinion
Some market watchers claim the RBI's premature redemption price of ₹14,957 per SGB unit is too low compared to spot gold rates. But the price formula follows the scheme rule: simple average of 999 purity gold closing prices over the prior three business days. Investors who bought at higher issue prices might feel shortchanged. The real test will come on August 11, when actual market inflows and subscription to any new tranche are measured. Will retail investors stick with gold or shift to other assets? That number alone will settle the noise.
Source: rbi.org.in
This story was synthesised by AI from the source linked above.
