The Reserve Bank of India (RBI) has issued a notification concerning the final redemption under the Sovereign Gold Bond (SGB) Scheme. In its press release issued on 22 March 2022, the central bank announced the tentative date of SGB’s financial redemption in 2024. The RBI announces the issuance of SGB tranches every financial year, along with the issue dates and redemption dates. Generally, while the tenor is eight years for SGBSs, premature redemption of the gold bonds is only permitted after five years from the date of issue of such bonds.
For the year 2024, two Sovereign Gold Bond schemes, previously launched in 2016, have come up for final redemption.
SGBs up for final redemption in 2024
SGB 2016 Series I matured on 8 February 2024 after its 8-year bond period. While the issue price at the time of its launch was Rs 2,600 per gram, the final redemption amount stands at Rs 6,271 per SGB unit.
On the other hand, the SGB 2016 Series II scheme, which was issued on 29 March 2016, shall be repayable on the expiration of eight years from the date of the issue, which is said to be 28 March 2024.
“Accordingly, the final redemption date of the above tranche shall be March 28, 2024 (March 29, 2024 being a holiday),” the notification reads.
Noting that the redemption price of SGB shall be based on the simple average of the closing price of gold of 999 purity of the week (Monday-Friday), preceding the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA), RBI further states, “The redemption price for the final redemption due on March 28, 2024 (March 29, 2024 being a holiday) shall be Rs 6601 per unit of SGB based on the simple average of closing price of gold for the week March 18-22, 2024.”
Other SGBs to go for final redemption
Sovereign Gold Bond 2016-17 – Series I and 2016–17—Series II will go for final redemption later this year. Series I which was issued at a price of Rs 3,119 on 5 August 2016 will tentatively go for final redemption in the first week of August 2024.
Similarly, bonds in Series II were released on 30 September 2016 at an issue price of Rs 3,150. Its tentative redemption date is expected in the last week of September 2024.
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