RBI Announces Early Redemption Prices for Sovereign Gold Bonds
MAS Team | 26 April 2024
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The Reserve Bank of India (RBI) has recently revealed the early redemption prices for Sovereign Gold Bonds (SGBs) from the 2017-18 Series IV and 2018-19 Series II tranches, which are due on April 23. This announcement aligns with the terms outlined in the Government of India notifications issued on October 6, 2017, and October 8, 2018. According to these terms, holders have the option of early redemption after five years from the issue date, coinciding with the interest payment dates on these bonds.
 
The redemption price calculation is based on the average of the closing prices of 999 purity gold, as reported by the India Bullion and Jewellers Association. The calculation considers the preceding three business days before the redemption date. As a result, the redemption price for the upcoming April 23 redemption stands at Rs7,325 per gram of gold. This price reflects the average gold prices recorded on April 18, 19, and 22.
 
In another related update, the RBI has facilitated the early redemption of the SGB 2017-18, Series III on April 16. The redemption price for this series has been set at Rs7,260 per unit, calculated through a similar averaging of gold prices over the relevant days before the redemption.
 
The Sovereign Gold Bond Scheme, launched under the Government Securities Act of 2006, aims to provide investors with a systematic option to invest in gold. It caters to various types of investors, including individuals, trusts, charitable institutions, and universities. Investors can start with investments as low as one gram of gold, with individuals allowed a maximum of 4 kg per fiscal year, and trusts and similar entities permitted up to 20 kg.