Investors in Sovereign Gold Bonds (SGB) 2015 to collect bumper returns

The RBI, in a statement yesterday, said the redemption price for the early redemption of SGB tranche-1 due on May 30 shall be ₹4,837 per unit of SGB and payable on May 29 (May 30, 2021, is Sunday). This translates into an appreciation of about 80 percent over the issue price of ₹2,684 per unit of SGB in 67 months. The redemption price of Sovereign Gold Bond (SGB) is based on the simple average closing gold price of 999 purity [published by the India Bullion and Jewellers Association Ltd (IBJA)] of the week (Monday-Friday) preceding the date of redemption.

The Government of India had come up with the SGB scheme in 2015 and the Reserve Bank of India (RBI) vide circular IDMD.CDD.No.939/14.04.050/2015-16, dated October 30, 2015, announced the issue of the first tranch of SGB. As per the terms and conditions of the issuance of Sovereign Gold Bonds, 2015-16, the bonds shall be repayable on the expiration of eight years from the date of issue. However, the Centre has announced the early redemption of the above issue.

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Surendra Naik

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