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Business News/ News / India/  Sovereign Gold Bond: Price for premature redemption of Series VIII of SGB 2017-18 due on May 20
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Sovereign Gold Bond: Price for premature redemption of Series VIII of SGB 2017-18 due on May 20

The RBI has set up a price for early redemption of Series VIII of SGB 2017-18.

The gold price has been moving upward of late after the US Fed hiked rates by 25 bps on May 3. (REUTERS)Premium
The gold price has been moving upward of late after the US Fed hiked rates by 25 bps on May 3. (REUTERS)

The RBI has set up a price for early redemption of Series VIII of SGB 2017-18. This series was introduced on November 20, 2017, with a fixed rate of 2.50 percent per annum on the bond's nominal value. According to an RBI notification dated May 19, 2023, the redemption price for premature redemption is due on May 20, 2023.

“(SGB 2017-18, Series VIII - Issue date November 20, 2017) 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 May 20, 2023," said RBI in a statement.

“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 Ltd (IBJA). Accordingly, the redemption price for premature redemption due on May 20, 2023 shall be 6,047/- (Rupees Six thousand and forty-seven only) per unit of SGB based on the simple average of closing gold price for the period May 17-19, 2023," the central bank further added.

The sovereign gold bonds will be repayable after eight years from the date of issuance. Premature redemption of these bonds is only permissible after the fifth year from the date of issue, and such repayments will be paid on the subsequent interest payment date. According to RBI, such gold bonds can be redeemed in Indian Rupees at maturity, with the redemption price based on the simple average of the closing price of gold of 999 purity over the previous three business days from the day of repayment, as announced by the India Bullion and Jewellers Association Limited. For an application for redemption, the RBI / depository shall notify the investor one month in advance of the bond's maturity date.

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Published: 20 May 2023, 04:24 PM IST
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