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Synopsis: The Reserve Bank of India (RBI) has announced the premature redemption of two Sovereign Gold Bond (SGB) series—Series IV (2017-18) and Series II (2018-19)—on April 23, 2025. Investors can redeem their bonds Rs9,669 per unit, providing an opportunity for liquidity amid the cessation of new SGB issuances.
In a move to provide liquidity to investors, the Reserve Bank of India (RBI) has opened the window for premature redemption of two Sovereign Gold Bond (SGB) series—Series IV (2017-18) and Series II (2018-19)—on April 23, 2025. These bonds, initially issued on October 23 in their respective years, are now eligible for early exit, aligning with the scheme's provision that allows redemption after a minimum holding period of five years on specific interest payout dates.
The redemption price has been set Rs9,669 per unit, calculated based on the simple average of the closing prices of 999 purity gold as published by the India Bullion and Jewellers Association (IBJA) on April 17, 21, and 22, 2025. This pricing method ensures that investors receive a fair market value for their holdings.
Investors interested in redeeming their bonds can submit requests through various channels, including banks, post offices, or stock exchanges, depending on where the bonds are held. Financial advisors recommend that investors consult with their respective institutions ahead of the redemption date to ensure a smooth transaction process.
This development comes in the wake of the Union Budget 2025, which announced the cessation of new SGB issuances. However, existing bonds will remain active until maturity or eligible early redemption dates, providing investors with continued opportunities to manage their investment portfolios effectively.
Earlier in April 2025, the RBI facilitated premature redemptions for other SGB series, including the 2017-18 Series III and the 2019-20 Series V. Investors in these series realized significant returns, highlighting the potential benefits of strategic early exits in response to market conditions.
The RBI's decision to allow premature redemption underscores its commitment to providing flexibility and liquidity to investors, especially in the context of volatile market conditions and the discontinuation of new SGB issuances. By enabling early exits, the RBI offers investors an opportunity to capitalize on favorable gold prices while maintaining the security associated with government-backed securities.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to consult with financial professionals before making investment decisions.
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