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Kolkata: The redemption price of the first SGB (Sovereign Gold Bond) of 2026 as announced by RBI will gladden the hearts of investors. The final redemption price for the SGB 2017-18 Series XIV is Rs 13,486 per unit, which signals a return of more than Rs 10,600 compared to the issue price. The premature redemption price for SGB 2018-19 Series IV has also been announced.
This announcement by the central bank if pertinent for those who invested in SGB 2017-18 Series XIV, a series which matured for redemption on January 1, 2026. The issue date of SGB 2017-18 Series XIV was January 1, 2017, and therefore, it completed its eight-year term on December 31, 2025. SGBs are redeemable after eight years from the issue date. The point to note is when the bonds were open for subscription, the issue price was Rs 2,781 per gram for those who made online application and Rs 2,881 per gram for other investors.
Redemption price is calculated on the data released by the India Bullion and Jewellers Association. It is based on the average gold closing price for the three working days prior to the redemption date. In this case, closing prices of gold on Dec 29-31, 2025 were taken and averaged to determine the redemption price. It came out to be Rs 13,486 per unit. In a press release, RBI clarified that the redemption price of SGBs is determined based on the price of gold of 999 purity.
The rule states when the sovereign gold bonds mature for payment, the money is transferred directly to their bank account. They do not get gold in lieu of the payment. The point to note here is that one of the driving motives for the SGBs was to curb the demand for physical gold. India is the second highest gold-consuming country in the world after China and since it imports most of the gold, it puts a severe drain on the forex reserves of the country (second only to crude oil). The govt then launched the SGBs to partially whet the investment appetite of the people but the quick rise of gold prices put strain on the finance of the government. Therefore the RBI has stopped issuing SGBs any more.
The RBI has also announced the premature redemption price for SGB 2018-19 Series IV. The issue date for this series was January 1, 2019. Rules permit premature redemption for the SGBs after a period of five years from the sale. The premature redemption price remains the same at Rs 13,486 per unit. The calculation is done with the same set of data as was done for the SGB 2017-18 Series XIV.
