Sovereign gold bonds or SGBs are issued by the government, for which investors get a holding certificate. It comprises government securities denominated in gold wherein investors are required to pay the issue price in cash.

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Though the tenor of the bond is 8 years, early encashment/redemption of the bond is allowed after the fifth year from the date of issue on coupon payment dates. The bond is tradable on exchanges, if held in demat form. It can also be transferred to any other eligible investor.

In case of premature redemption, investors can approach the concerned bank/SHCIL offices/post office/agent thirty days before the coupon payment date. Request for premature redemption can only be entertained if the investor approaches the concerned bank/post office at least one day before the coupon payment date, according to Reserve Bank of India (RBI).

The proceeds will be credited to the customer’s bank account provided at the time of applying for the bond.

On maturity, these bonds are redeemed in rupees and the redemption price is based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association Limited.

The investors are advised one month before maturity regarding the ensuing maturity of the bond.

On the date of maturity, the maturity proceeds are credited to the bank account as per the details on record. In case there are changes in any details, such as account number, email ids, then the investor must intimate the bank/SHCIL/PO promptly.

Meanwhile, the tenth installment (series X) of SGB scheme for 2020-21 is ongoing. The issue price for the same has been fixed at Rs 5,104 per gram of the yellow metal. Online subscribers can however secure these bonds at a discount of Rs 50 per gram. This subscription of bonds will close on January 15, according to the Reserve Bank of India (RBI).

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First Published:Jan 13, 2021 2:03 PM IST