Final redemption under Sovereign Gold Bond (SGB) Scheme - Redemption Price for final redemption of SGB 2018-19 Series-II due on October 23, 2026
The Reserve Bank of India announced on October 22, 2026 that SGB 2018-19 Series-II, issued on October 23, 2018, would undergo final redemption on October 23, 2026 after eight years
Why in news
The Reserve Bank of India announced on October 22, 2026 that SGB 2018-19 Series-II, issued on October 23, 2018, would undergo final redemption on October 23, 2026 after eight years. It notified ₹14,425 per unit, calculated from the simple average of IBJA-published closing prices of 999-purity gold for the preceding thr
Static anchor
A Sovereign Gold Bond is a government-linked financial instrument whose redemption value, for the tranche covered here, is determined at final maturity through the prescribed gold-price benchmark rather than physical delivery of gold; the supplied record specifically establishes the eight-year repayment rule and benchm
Background
- The RBI press release concerns the final redemption of SGB 2018-19 Series-II, whose issue date was October 23, 2018. It states that repayment occurs on expiry of eight years from issue.
- The redemption price is calculated in Indian rupees using the simple average of closing prices of 999-purity gold for the previous three business days, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Reusable anchors
Awaiting a reviewed note.
Official facts
- In terms of GOI notification F.No.4(22)-B(W&M)/2018 dated October 08, 2018 (SGB 2018-19 Series-II-Issue date October 23, 2018) on Sovereign Gold Bond Scheme, the Gold Bond shall be repayable on the expiration of eight years from the date of issue of the Gold Bonds. Accordingly, the final redemption date of the above tranche shall be October 23, 2026.
- Accordingly, the redemption price for final redemption due on October 23, 2026, shall be ₹14,425/- (Rupees Fourteen Thousand Four Hundred and Twenty-Five only) per unit of SGB based on the simple average of closing price of gold for the three business days i.e., October 19, October 21, and October 22, 2026.
- The redemption price of SGB shall be based on simple average of closing price of gold of 999 purity of previous three business days from the date of redemption, as published by the India Bullion and Jewellers Association Ltd (IBJA).
Analysis — not an official claim
Awaiting a reviewed note.
India implications
- The case illustrates how a government-linked financial instrument can mobilise household savings through a transparent, market-referenced redemption formula.
- For investors, the practical consequence is the need to distinguish final maturity from any separate premature-redemption facility and to understand that the price is determined by the prescribed gold benchmark rather than an investor’s pur
- For public finance and monetary policy, gold-linked instruments can be discussed in relation to financialisation of savings and reduced dependence on physical gold imports, but those broader outcomes are not measured in the supplied record.
Way forward
- Publish redemption dates and benchmark methodology prominently through issuing and servicing channels.
- Explain clearly that a notified final redemption price is not, by itself, an investor’s total return; entry price and other applicable terms also matter.
- Maintain consistent disclosure of the purity standard, reference institution, averaging window and applicable redemption date.
- Strengthen investor education so holders distinguish final redemption from any separate premature-redemption route.
Prelims traps
Awaiting a reviewed note.
Mains practice
Examine how the redemption mechanism for the SGB 2018-19 Series-II balances predictability for investors with exposure to gold-price movements.
Use in an answer
Use this case to illustrate rule-based valuation, benchmark transparency, financialisation of savings, and the distinction between final maturity and premature redemption in GS3 economy answers.
Recall card
SGB 2018-19 Series-II, issued on October 23, 2018, reaches final redemption on October 23, 2026 after eight years. RBI notified ₹14,425 per unit, calculated as the simple average of IBJA-published 999-purity gold closing prices for October 19, 21 and 22, 2026.