The Reserve Bank of India has fixed a price of ₹6,331 per unit for premature redemption of two tranches of sovereign gold bond issued in January 2018 and January 2019.
While SGBs are issued for eight years, investors are allowed to prematurely redeem the bonds after five years from the date of issue. Accordingly, the next due date of premature redemption of the above two tranches will be January 1, said the central bank on Friday.
The redemption price of SGB shall be based on the simple average of closing gold price of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association.
Accordingly, the RBI said the redemption price for premature redemption due on January 1 will be ₹6,331 per unit of SGB based on the simple average of closing gold price for three business days December 27-29.
Investors who had invested in these SGBs have made substantial profit. The Series-IV SGB was issue at a price of ₹3,119 per unit on January 1, 2019 and the series XIV which was issued on January 1, 2018 was priced at ₹2,881 per unit. In addition, investors were paid 2.50 per cent per annum.