RBI Announces Premature Redemption Price for SGB 2019-20 Series VII at ₹15,275 per Unit

The Reserve Bank of India (RBI) has announced the premature redemption price for Sovereign Gold Bond (SGB) 2019-20 Series VII. The redemption, due on 10 June 2026, is priced at ₹15,275 per unit. This price was calculated as the simple average of the closing price of gold of 999 purity for three business days — 5 June, 8 June, and 9 June 2026 — as published by the India Bullion and Jewellers Association Ltd (IBJA). This particular tranche was originally issued on 10 December 2019, under a Government of India notification.

Sovereign Gold Bonds are government securities denominated in grams of gold. They are issued by the RBI on behalf of the Government of India and serve as a substitute for holding physical gold. Each unit of an SGB is equivalent to one gram of gold. Investors earn a fixed annual interest in addition to any capital gain linked to gold prices at the time of redemption. The scheme was introduced to reduce the demand for physical gold and to channel domestic savings into financial instruments.

The standard tenure of an SGB is eight years. However, premature redemption is permitted from the fifth year onwards, but only on the dates on which interest is payable — typically twice a year. The redemption price is always linked to the prevailing market price of gold rather than the issue price, meaning the investor's return depends directly on gold price movements over the holding period. Early exit before the fifth year is possible only through trading on stock exchanges where the bonds are listed.

Exam Takeaway: For competitive exams, key facts about the SGB scheme include: issued by RBI for the Government of India; tenure is 8 years; premature redemption allowed from the 5th year on interest payment dates; redemption price based on a simple average of gold's closing price (999 purity) for the previous three business days as per IBJA data; bonds are both tradeable on exchanges and eligible for collateral against loans. These features frequently appear in banking, UPSC, and SSC general awareness sections.