RBI Finalizes Redemption Price for SGB, Offering Clarity on Fifth-Year Gold Bond Liquidity
The Reserve Bank of India (RBI) has issued a formal notification detailing the premature redemption price for a specific tranche of Sovereign Gold Bonds (SGB). The release provides crucial parameters for investors holding the SGB 2020-21 Series-II. This circular confirms the necessary steps and the calculation methodology for the upcoming redemption due date.Parameters for SGB Premature Redemption
The RBI confirmed that premature redemption of the SGB 2020-21 Series-II is permitted under specific conditions. The original notification, dated April 13, 2020, mandates that redemption can occur after the fifth year from the issuance date.For the SGB 2020-21 Series-II, the next scheduled due date for premature redemption is May 19, 2026. This date aligns with the fifth-year anniversary, marking the window for investors to redeem their bonds on the day interest is payable.
Determining the Gold Bond Redemption Price
The valuation process for the SGB redemption price is standardized and anchored to physical gold market rates. The redemption value is not arbitrary; it is pegged to a verifiable market metric.Specifically, the redemption price of the SGB is determined by the simple average of the closing price of 999 purity gold. This average calculation covers the previous three preceding business days from the actual date of redemption.
Finalized Redemption Price of ₹15,904 per Unit
Based on the formula and the due date of May 19, 2026, the RBI has announced the specific redemption rate. The redemption price for the SGB 2020-21 Series-II is set at ₹15,904 per unit.This figure is based on the simple average closing price of gold for the three business days immediately preceding May 19, 2026. These crucial calculation days include May 14, May 15, and May 18, 2026. The RBI has provided this detailed pricing structure through its official channels.
Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
Any views, opinions, or statements expressed, where applicable, are those of the respective analysts or experts and do not reflect the views of this website. The website has no association with such viewpoints and does not assume any responsibility for them.