The Reserve Bank of India (RBI) has announced the premature redemption price for sovereign gold bond (SGB) Series II of 2016-17 due on March 30, 2024. The premature redemption rate for the same is ₹6,601 per unit of SGB.
The redemption price of
SGB is based on the simple average of the closing gold price of 999 purity of the previous three business days from the date of redemption as published by the India Bullion and Jewellers Association (IBJA).
Accordingly, the redemption price for premature redemption of SGB Series II of 2016-17 is based on the simple average of the closing gold price for the week of March 18-22, 2024.
SGB and its early encashment
Sovereign gold bonds or SGBs are issued by the government, for which investors get a holding certificate. It comprises government securities denominated in gold wherein investors are required to pay the issue price in cash.
Though the tenure of the bond is eight years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates.
Ways to prematurely withdraw SGBs
In case of premature redemption, investors can approach the concerned bank/Stock Holding Corporation of India Limited (SHCIL) offices/post office/agent thirty days before the coupon payment date.
Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date, according to the Reserve Bank of India (RBI).
The proceeds are credited to the customer’s bank account provided at the time of applying for the bond.
Maturity
On maturity, these bonds are redeemed in rupees and the redemption price is based on the simple average of the closing price of gold of 999 purity of the previous three business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.
The investors are advised one month before maturity regarding the ensuing maturity of the bond.
On the date of maturity, the maturity proceeds are credited to the bank account as per the details on record.
