Sovereign Gold Bond Scheme: RBI Sets Price For Premature Redemption of SGBs
RBI Sets Price For Premature Redemption of Sovereign Gold Bonds: The Reserve Bank of India (RBI) has set the price for premature redemption of Sovereign Gold Bonds due on November 20. The price will be Rs 6,076 per unit.
"The redemption price for the premature redemption due on November 20, 2022 shall be Rs 6,076 per unit of SGB, based on the simple average of closing gold price for three business days -- November 15, 16, and 17, 2023," the RBI said.
What are Sovereign Gold Bonds?
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 the RBI on behalf of the 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 scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of domestic savings -- used for the purchase of gold -- into financial savings.
The price of the bond is fixed in Indian rupees on the basis of simple average closing price of gold of 999 purity, published by the India Bullion and Jewellers' Association Ltd for the last 3 working days of the week preceding the subscription period.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers/audience to consult their financial advisors before making any money related decisions.)