Sovereign Gold Bond Scheme: SGB premature redemption due on April 28, RBI sets price at ₹9,600 per unit

Sovereign Gold Bond Scheme: The Reserve Bank of India (RBI) has announced the premature redemption price for the Sovereign Gold Bond (SGB) Scheme, Series I of 2020-21, setting it at ₹9,600 per unit. The redemption is scheduled for April 28, 2025. SGBs can be redeemed prematurely after the completion of five years from the issue date, which for this series is April 28, 2020.

“In terms of GOI Notification F. No. 4(4)-B(W&M)/2020 dated April 13, 2020 (SGB 2020-21 Series I - Issue date April 28, 2020) on Sovereign Gold Bond Scheme, premature redemption of Gold Bond may be permitted after fifth year from the date of issue of such Gold Bond on the date on which interest is payable. Accordingly, the next due date of premature redemption of the above tranche shall be April 28, 2025,” said the RBI in its circular on Friday.

SGB premature redemption price

“Further, 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 (IBJA). Accordingly, the redemption price for premature redemption due on April 28, 2025, shall be ₹9,600 per unit of SGB based on the simple average of closing gold price for the three business days i.e., April 23, April 24, and April 25, 2025,” added the central bank in its statement.

SGBs are government securities denominated in grams of gold, offering investors both the market-linked value of gold at maturity and an assured annual interest of 2.5 per cent, payable semi-annually. The government has since discontinued fresh issuances of SGBs after announcing so in Budget 2025.

67 tranches of SGBs issued till FY25

The government has issued a total of 67 tranches of Sovereign Gold Bonds (SGBs) amounting to 146.96 tonnes of gold till 2024-25, Parliament was informed on April 1. The outstanding value as on March 20, 2025, on issue price is ₹67,322 crore for 130 tonnes of gold, Minister of State for Finance Pankaj Chaudhary said in a written reply.

Redemption of SGBs is based on the prevailing market price, he said. The government has maintained a Gold Reserve Fund (GRF) in the Public Account where the price and interest differential amount is credited in time, he said.

The SGBs, in addition to other borrowing instruments, have been an instrument for raising resources for financing fiscal deficit, it said. However, in addition to these, SGBs also served the purpose of savings/financial instruments as an alternative to physical gold, he said. Due to the recent gold price volatility and global economic headwinds, this form of borrowing has become relatively expensive.