The RBI announced that the redemption for the SGB 2021-22 Series-III is allowable on June 08, 2026. The redemption price will be determined based on the average closing prices of gold.
Details on Premature Redemption of SGB
The Reserve Bank of India (RBI) has issued clarification regarding the premature redemption of the Sovereign Gold Bond (SGB) 2021-22 Series-III, which is scheduled for June 08, 2026. According to the Government's notification, redemption is permitted after the fifth year of issuance, coinciding with the interest payment date.
For this tranche, the redemption price will be calculated based on the simple average of the closing prices of gold for the last three working days preceding the date of redemption. This mechanism ensures that the investors receive a fair value for their investments.
As this redemption date approaches, investors and financial advisors should be prepared for the implications of market fluctuations on the final redemption price. The structure of this bond scheme encourages investment in gold while providing liquidity options after a specified holding period.
Legal practitioners should advise clients looking to redeem their bonds on understanding market conditions and the calculation of the redemption price well in advance.
Citations
- GOI Notification (2021) SGB 2021-22 Series-III
