Final Redemption of SGB: Sovereign Gold Bonds 2016-17 Series-II
The SGB tranche was open for subscription from 1 to 9 September 2016. Originally scheduled for issue on 23 September 2016, the bonds were rescheduled for issue on 30 September 2016. The issue price was Rs 3,150 and the tentative redemption date is set for the last week of September 2024.What was the issue price and interest rate of SGB Series II?
It is prudent to remember that the initial SGB was purchased at Rs 3,150 per gram of gold. According to the notification issued by the RBI on August 8, 2016, “the SGB offered a fixed rate of interest of 2.75% per annum on the initial investment amount.” Currently, the prevailing interest rate is 2.50%.
Issue date
The issue date was September 23, 2016.
The bond term is 8 years and is eligible for early redemption from the fifth year onwards. As Series II of the SGB 2016-17 was issued on 23 September, the final redemption will be around the last week of September 2024. Redemption price
The bond price will be fixed in Indian Rupees on the basis of the simple average of the closing price of 999 purity gold published by the India Bullion and Jewellers Association Limited for the week (Monday to Friday) preceding the subscription period. Therefore, the redemption price of the SGB bond is based on the simple average of the closing price of gold for the week preceding the redemption date.
As per RBI norm, the receiving office will notify the investor about the maturity date of the gold bond one month prior to its maturity.
Upcoming SGB final redemption
Sovereign Gold Bonds 2016-17 – Series III
Applications for the bond issue were accepted between October 24, 2016, and November 2, 2016. The bonds were issued on November 17, 2016. The issue price was Rs 3,007 per gram. The last redemption date is expected to be around November 17, 2024.
SGB Details
Every fiscal year, the RBI announces the issue of tranches of SGB. As of now, an investor is limited to 4 kg per person every fiscal year, with a minimum investment of 1 gram. A person has to indicate in the application form how much he/she wishes to invest to make an investment. The amount of gold invested is determined by the issue price indicated by the RBI. The balance is refunded to the investor’s bank account.
Loan
The bonds may be used as collateral for loans. The loan-to-value (LTV) ratio will be set equal to that of ordinary gold loans ordered by the Reserve Bank from time to time.
Early Redemption List (October 2024 – March 2025)
The Reserve Bank of India (RBI) has issued a press release outlining the details of the SGB tranches scheduled for early redemption during October 2024 and March 2025, along with a period for submitting applications for early redemption. It may be noted that early redemption of gold bonds is permitted after five years from the date of issue of such bonds.
Check the Full list here.
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