Premature redemption under Sovereign Gold Bond (SGB) Scheme - Redemption Price for premature redemption of SGB 2020-21 Series VII due on October 19, 2026 (October 20, 2026, being a holiday)
Distilled Policy Brief
- The Reserve Bank of India announced the premature redemption price for the Sovereign Gold Bond (SGB) 2020-21 Series VII due on October 19, 2026, set at ₹14,614 per unit.
- Premature redemption of SGBs is permitted after the fifth year from the date of issue on interest payment dates, in accordance with the Government of India notification from October 2020.
- The redemption price is calculated using the simple average of the closing price of 999 purity gold of the previous three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA).
🎯 Prelims High-Yield Examination Points
Premature redemption of Sovereign Gold Bonds is permitted after the fifth year from the issue date, with the redemption price based on the simple average of closing gold prices of 999 purity of the previous three business days published by IBJA.
⚖️ Mains Analytical & Syllabus Linkages
Sovereign Gold Bonds act as an alternative to physical gold investment, helping to manage the country's current account deficit by reducing physical gold imports and mobilizing household savings into financial instruments.
🎯 UPSC Prelims Practice Drill
With reference to the premature redemption under the Sovereign Gold Bond (SGB) Scheme, consider the following statements: 1. Premature redemption of SGBs is permitted after the fifth year from the date of issue on interest payment dates. 2. The redemption price is determined based on the simple average of the closing price of gold of 999 purity of the previous three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA). Which of the statements given above is/are correct?
- [A] 1 only
- [B] 2 only
- [C] Both 1 and 2
- [D] Neither 1 nor 2
▶ Reveal Official Answer & Analytical Explanation
Both statements are correct according to the Sovereign Gold Bond Scheme guidelines. Premature redemption is permitted after the fifth year from the date of issue on interest payment dates, and the price is calculated using the simple average of the closing price of 999 purity gold of the previous three business days published by the IBJA.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.