RBI announces the premature redemption price for Sovereign Gold Bonds, paying investors Rs 7,325 for each unit
Premature redemption date and price for SGB currency: The Sovereign Gold Bonds (SGB) premature redemption price for the 2017–18 Series IV and 2018–19 Series II tranches is fixed for Tuesday, according to the Reserve Bank of India (RBI).
The Government of India has issued notifications dated October 6, 2017, and October 8, 2018, which state that premature redemption of SGB is allowed after the bond’s fifth year from the date of issuance, which corresponds with the day on which interest is due.
The India Bullion and Jewellers Association Ltd. (IBJA) publishes the simple average of the closing gold price of 999 purity for the three business days before the redemption date, which will serve as the basis for the SGB redemption price.
As a result, the simple average of the closing gold prices for April 18, 19, and 22 has been used to determine the redemption price for the premature redemption that is due on April 23. This amount is Rs 7325 per unit of SGB.
The RBI has let investors in the Sovereign Gold Bond Scheme of 2017–18, Series III, redeem their bonds early.
April 16 is the next redemption date for the SGB 2017–18 Series III. According to the RBI press release, the early redemption price of Rs 7260 per SGB unit has been set, taking into account the average closing gold price over the preceding three working days.
Under the Government Securities Act of 2006, the Sovereign Gold Bond Scheme was introduced to provide investors with a structured way to purchase gold.
Investors in the scam included a wide range of organizations, including trusts, colleges, and philanthropic organizations.
The bonds had a one gram minimum subscription restriction and were valued in multiples of one gram of gold. Individuals were allowed to choose up to 4 kilograms every fiscal year, while trusts and other similar corporations were limited to 20 kg.
Investors have the ability to sell their assets before the maturity date if necessary, thanks to the premature redemption option.
The early encashment option, in conjunction with additional perks including interest payments and tax advantages, has made the Sovereign Gold Bond Scheme an appealing investment choice for people and organizations wishing to diversify their portfolios with gold-backed securities.
By offering openness and clarity in the redemption process, the publication of the redemption price for SGB 2017–18 Series IV and SGB 2018–19 Series II enhances the relationship between investors and the plan.
