RBI Announces Premature Redemption Price for SGB 2019–20 Series‑VIII due on January 21, 2026

The Reserve Bank of India has released the premature redemption details for the Sovereign Gold Bond (SGB) 2019–20 Series‑VIII. This tranche, originally issued on January 21, 2020, becomes eligible for early redemption after the completion of five years.

The RBI confirmed that the redemption date falls on January 21, 2026, aligning with interest payment timelines as prescribed in the Government of India notification. The redemption price has been calculated using the prescribed mechanism based on the India Bullion and Jewellers Association Ltd (IBJA) gold rates.

Government Notification and Redemption Eligibility

The premature redemption clause for this tranche is governed by the Government of India notification F.No.4(7)-B(W\&M)/2019 dated September 30, 2019. As per the notification, investors can redeem their holdings after the fifth year, provided the date coincides with an interest payment date.

Accordingly, the SGB 2019–20 Series‑VIII qualifies for redemption on January 21, 2026, marking the first eligible call date for early exit. This framework ensures consistent redemption windows aligned with the bond’s interest disbursement cycle.

Calculation Method for Redemption Price

The redemption price is determined using a simple average of the closing price of gold of 999 purity published by the IBJA. For this tranche, the RBI considered the gold prices from January 16, 2026, January 19, 2026, and January 20, 2026.

Based on this methodology, the premature redemption price has been fixed at ₹14,432 per unit. This calculation framework aims to offer transparency and uniformity across all SGB redemption assessments.

Gold Price Inputs and IBJA Data Usage

The IBJA publishes benchmark gold prices used widely across the financial markets. For the purpose of early redemption, only gold of 999 purity is taken into account in calculating the average.

The RBI applied the three most recent business days’ prices preceding the redemption date to ensure accuracy in determining the payable amount. The resulting figure of ₹14,432 reflects the fluctuations recorded during the specified period.

Investor Impact and Redemption Timeline

Investors holding the SGB 2019–20 Series‑VIII can opt for early redemption on January 21, 2026, should they wish to exit before maturity. The RBI will credit the redemption proceeds to eligible investors following standard settlement procedures.

Holders are not required to submit separate requests if their bonds are held in dematerialised form, as the process is automated through the depository system. This redemption event marks a key milestone for bondholders reaching the five‑year exit window.

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Conclusion

The RBI’s announcement provides clarity to investors awaiting the first early redemption window for this SGB tranche. The fixed redemption price of ₹14,432 per unit, based on IBJA‑sourced gold prices, ensures a transparent valuation method aligned with official guidelines.

The due date of January 21, 2026, marks exactly five years since issuance, fulfilling the early redemption condition under the Sovereign Gold Bond Scheme. Investors can now plan their next steps in accordance with the published schedule and valuation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.