RBI unveils Sovereign Gold Bond series X redemption, 112% profit

The Reserve Bank of India has unveiled the redemption price for Sovereign Gold Bond Series X of 2017-18, slated for maturity on December 4, 2023. At a profitable ₹6,265 per unit, this redemption fetches a significant gain of ₹3,304 per unit, marking a 111.58% surge over the initial issue price of ₹2,961 per unit.

The computation of the redemption price for SGB involves a straightforward average of the closing gold price of 999 purity over the preceding three business days before the redemption date, sourced from the India Bullion and Jewellers Association (IBJA). In this instance, the redemption price is calculated using the simple average of the closing gold prices for November 29, 30, and December 1, 2023.

What are Sovereign Gold Bonds?

Sovereign Gold Bonds are government-issued securities offered to investors in exchange for a holding certificate. These bonds, denominated in gold, require investors to pay the issue price in cash. While the tenure of the bond spans 8 years, early encashment or redemption is permissible after the fifth year from the issuance date on coupon payment dates.

Can you prematurely withdraw SGBs?

For those looking to prematurely withdraw SGBs, the process entails approaching the relevant bank/SHCIL offices/post office/agent at least thirty days before the coupon payment date.

A request for early redemption can only be processed if submitted at least one day before the coupon payment date, as per the directives laid out by the RBI. The proceeds from such redemptions are credited to the investor's specified bank account provided during the bond application.

Upon maturity, these bonds are redeemed in Indian rupees, with the redemption price determined by the average of the closing price of gold of 999 purity over the prior three business days from the repayment date, as published by the India Bullion and Jewelers Association Limited. Investors receive advance notification regarding the impending maturity of the bond one month beforehand.

The maturity proceeds are then credited to the registered bank account. Any changes in details, such as account numbers or email IDs, require prompt notification to the bank/SHCIL/PO for proper processing.

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