The RBI has announced that the premature redemption for the Sovereign Gold Bond (SGB) 2021-22 Series V is permitted from August 17, 2026, with the redemption price determined based on a simple average of closing prices.
Premature Redemption for Sovereign Gold Bond Scheme
The Reserve Bank of India (RBI) has notified that premature redemption of Sovereign Gold Bond 2021-22 Series V may be allowed from August 17, 2026, as per the Government of India notification F.No. 4(5)-B(W&M)/2021 dated May 12, 2021. This decision marks an important development for investors seeking liquidity options before the maturity date.
The SGB 2021-22 Series V was issued on August 17, 2021, and the premature redemption is allowable after the completion of five years from the issue date. The RBI has stated that the redemption price will be calculated based on the simple average of the closing price of gold of 999 purity for the last three trading days preceding the redemption date.
This ruling provides clarity and a mechanism for investors wishing to exit their investment in gold at a market-based valuation. Practitioners should note that this development aligns with the government’s aim to enhance investment options in financial instruments linked to gold.
Citations
- GOI Notification F.No. 4(5)-B(W&M)/2021 (2021)