The Reserve Bank of India (RBI) on Wednesday announced that the redemption price for two series of the Sovereign Gold Bond (SGB) Scheme has been fixed at ₹12,801 per unit, reflecting the sharp rise in domestic gold prices over recent months.
According to the official notification, holders of the SGB 2017–18 Series-XI, issued on December 11, 2017, will receive ₹12,801 per unit as the final redemption amount. These investors had initially purchased the bonds at ₹2,954 per unit, and have also earned an annual interest of 2.5% on their investment over the tenure of the scheme.
The SGB scheme was introduced by the Government of India to discourage investment in physical gold and instead promote financial instruments linked to the metal. India remains one of the world’s largest importers of gold, and reducing physical demand is key to managing trade balances.
Strong Gold Price Rally Boosts Investor Gains
The surge in gold prices over the past few months has significantly enhanced returns for SGB investors. The sharp appreciation triggered widespread discussions about the substantial gains early investors stand to realise upon redemption.
In addition to the 2017–18 tranche, the RBI has also fixed ₹12,801 per unit as the premature redemption price for the SGB 2019–20 Series-I, which is due for early redemption on December 11, 2025.
How the Redemption Price Was Calculated
The RBI stated that redemption prices are based on the simple average of the closing price of gold (999 purity) for the three working days preceding the redemption date, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Accordingly, the final price of ₹12,801 was determined using gold prices from Monday to Wednesday, the central bank added.
The announcement underscores the growing benefits of investing in government-backed gold instruments amid a rising gold market, providing investors with both capital appreciation and secure returns.