SGB Investors Gain Clarity: RBI Announces Redemption Price for Sovereign Gold Bond Premature Payout
RBI Sets Redemption Rate for Sovereign Gold Bonds (SGB) 2019-20 Series-II
The Reserve Bank of India (RBI) has finalized the redemption price for premature redemptions under the Sovereign Gold Bond (SGB) Scheme. This notification clarifies the valuation process for investors utilizing SGB 2019-20 Series-II, which was initially issued on July 16, 2019.Premature redemption of these gold bonds is permitted starting after the fifth year from the issue date and must be executed on the date when interest is payable. Consequently, the next scheduled due date for premature redemptions of this tranche is established as July 16, 2026.
Valuation Methodology for SGB Premature Redemption
The redemption price determination adheres to specific standards outlined in the Government of India notification F.No.4(7)-B(W&M)/2019 dated May 30, 2019. The calculation ensures transparency by basing the payout on gold market movements.The official method dictates that the SGB redemption price must be calculated using a simple average of the closing price of 999 purity gold. This price average is determined from the three business days preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Redemption Price Announced for July 16, 2026
For the premature redemptions scheduled on July 16, 2026, the RBI has set a definitive price. The redemption rate for one unit of SGB is fixed at ₹14,199/- (Rupees Fourteen Thousand One Hundred and Ninety Nine Only).This valuation reflects the simple average of gold closing prices recorded over the three business days leading up to the redemption date: specifically July 13, July 14, and July 15, 2026. The issuance of this detailed price provides clear guidance for bondholders regarding their payout on the specified due date.
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