Sovereign Gold Bonds: Investors can redeem January 2016 SGBs at 85% premium over issue price
Premium- The redemption price for the premature redemption falling due on February 08, 2022 shall be ₹4,813 per unit of SGB, RBI said in a release
The Reserve Bank of India (RBI) has announced the redemption price for the premature redemption of Sovereign Gold Bonds (SGBs) that is due on February 8, will be ₹4,813 per unit, which is about 85% premium from its issue price of ₹2,600 fixed in January 2016.
"The redemption price for the premature redemption falling due on February 08, 2022 shall be ₹4,813 per unit of SGB, based on the simple average of closing gold price for the week January 31- February 04, 2022," RBI said in a release.
SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by Reserve Bank on behalf of Government of India.
As per the government notification on SGB issued on January 14, 2016, redemption may be permitted after the fifth year from the date of issue of such gold bonds on the date on which interest is payable.
The January 2016 issue was the second tranche of the government’s gold bond scheme that was launched in November 2015. The first tranche of sovereign gold bonds became available for purchase between 5-20 November, 2015.
“The redemption price of SGB is based on the simple average closing gold price of 999 purity [published by the India Bullion and Jewellers Association Ltd (IBJA)] of the week (Monday-Friday) preceding the date of redemption," stated the RBI's release on Tuesday. Therefore, the forthcoming due date of premature redemption of the above tranche shall be February 08, 2022, it add.
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