The Reserve Bank of India has released dates for the premature withdrawal of Sovereign Gold Bonds (SGB) issued under different tranches. The RBI had through a press release listed out the details of the SGB tranches, which were falling due for premature redemption during H1 of 2022-23, i.e., from April 1, 2022 to September 30, 2022, along with a window for submission of request for premature redemption.
An SGB is a type of gold bond issued by the central government, and has a lock-in period of eight years. However, if investors wish, they can redeem their bonds bought at specific intervals from the fifth year onwards. For instance, suppose you subscribed to the 2017-2018 Series II, so in 2022, you will complete five years of investment. So now, either you can wait for three more years to redeem your SGBs, or, redeem them now at the announced RBI buyback window.
The redemption price of the respective SGBs will be based upon the simple average closing gold price of 999 purity, which is published by the India Bullion and Jewellers Association Ltd (IBJA) during the week (Monday-Friday) preceding the date of redemption of the respective bond. The RBI will notify about the specific price as and when the time comes for premature redemption of those bonds.