Premature redemption under Sovereign Gold Bond (SGB) Scheme - Redemption Price for premature redemption of SGB 2019-20 Series IV due on September 17, 2026
Distilled Policy Brief
- Premature redemption under the Sovereign Gold Bond (SGB) Scheme is permitted after the fifth year from the date of issue on interest payment dates.
- The redemption price for the SGB 2019-20 Series IV due on September 17, 2026, is fixed at ₹15,173 per unit based on the simple average of closing gold prices of 999 purity published by IBJA.
- The Sovereign Gold Bond Scheme acts as an alternative to holding physical gold, helping to manage the current account deficit by reducing physical gold imports.
🎯 Prelims High-Yield Examination Points
SGB redemption price is determined by the simple average of the closing price of 999 purity gold of the previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA). Premature redemption is allowed after the 5th year.
⚖️ Mains Analytical & Syllabus Linkages
Analysis of financialisation of household savings, substitution of physical gold demand to reduce trade deficit, and monetary policy impacts of government securities linked to precious metals.
🎯 UPSC Prelims Practice Drill
With reference to 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, specifically on interest payment dates. 2. The redemption price for premature redemption is determined based on the simple average of closing gold prices 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 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 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.