RBI Notifies Sovereign Gold Bond 2019-20 Series-V Premature Redemption Price for April 15, 2026
Why it matters
The Sovereign Gold Bond (SGB) Scheme is an important financial instrument launched by the Government of India in November 2015 to reduce demand for physical gold, thereby managing the country's current account deficit. The RBI, as the agent for GoI, regularly issues notifications regarding interest payments and redemption prices. Premature redemption is permitted after the fifth year from the date of issue, coinciding with interest payment dates. This particular notification provides a crucial financial detail for investors in the specified SGB series, ensuring transparency and adherence to scheme guidelines for bondholders exercising their redemption option.
| Aspect | Details |
|---|---|
| SGB Series | SGB 2019-20 Series-V |
| Issue Date | October 15, 2019 |
| Next Premature Redemption Date | April 15, 2026 |
| Redemption Price | ₹15,009/- per unit |
| Calculation Basis | Simple average of closing price of gold (999 purity) for April 09, 10, 13, 2026 (three business days prior) by IBJA. |
| Notification Date | April 13, 2026 (RBI Press Release 2026-2027/81) |
For UPSC candidates, understanding the SGB Scheme is vital for topics in Indian Economy and Financial Markets. It demonstrates a government initiative aimed at financialization of savings and managing external sector vulnerabilities. The mechanism of premature redemption, its pricing formula, and the role of the RBI as an implementing agency are key details. This event highlights the practical application of government schemes and regulatory functions in financial markets.
- SGB Scheme Launch: November 2015, by the Government of India.
- Objective: To reduce demand for physical gold and shift household savings into financial assets.
- Interest Rate: SGBs offer a fixed interest rate (currently 2.50% per annum, paid semi-annually).
- Redemption Period: Maturity period of eight years, with an exit option from the fifth year onwards.
- Taxation: Interest on SGBs is taxable, but capital gains are exempt if held till maturity.
Glossary
Sovereign Gold Bond (SGB): Government securities denominated in grams of gold, offered by the RBI on behalf of the Government of India.
Premature Redemption: The option for an investor to redeem their bond before its full maturity period, typically subject to specific conditions and pricing mechanisms.