Description

NSE announces early redemption facility for Sovereign Gold Bonds (SGBs) held in physical mode for 2019-20 Series III and IV during January-March 2026, following RBI guidelines for premature redemption after five years.

Summary

NSE has announced the early redemption facility for Sovereign Gold Bonds (SGBs) held in physical mode for January 2026 to March 2026. This circular is a continuation and partial modification of circular ref no 10/2025 dated September 01, 2025. The facility covers 2019-20 Series III and IV SGBs, allowing investors who have completed five years from the date of issue to redeem their bonds prematurely. The redemption price will be based on the simple average closing gold price of 999 purity published by IBJA for the week preceding the redemption date.

Key Points

  • Early redemption facility available for SGBs held in physical form after completion of fifth year from issue date
  • Two SGB series eligible: 2019-20 Series III and 2019-20 Series IV
  • Redemption price based on simple average closing gold price of 999 purity (IBJA) for the week preceding redemption date
  • Only investors who successfully applied in respective SGB series in physical mode can participate
  • Partial redemption allowed; modification and cancellation permitted only during redemption period
  • Trading members must verify and update KYC of SGB investors before placing early redemption requests
  • Trading members must ensure investor consent to participate and adherence to applicable legal framework
  • Status of bids available based on RBI response on respective redemption date (tentatively post 6:00 PM)

Regulatory Changes

This circular continues the framework established by:

  • Government of India notification dated July 14, 2016 permitting premature redemption of SGB units after five years
  • RBI circular Ref. No. RBI/2021-2022/114 dated October 22, 2021 regarding early redemption facility
  • RBI Press release Ref. No-2025-2026/955 dated August 22, 2025 providing calendar for premature redemption during October 2025 - March 2026

The circular modifies previous circular ref no 10/2025 dated September 01, 2025 to extend the redemption facility timeline.

Compliance Requirements

For Trading Members:

  • Comply with requirements specified in this circular and other NSEIL circulars related to SGB Platform
  • Adhere to requirements prescribed by RBI, GOI, and SEBI (applicable legal framework)
  • Ensure investors have provided consent to participate in the Platform
  • Input correct Investor ID and Investment Serial Number for redemption requests
  • Verify displayed investor details and bank details for correctness before placing requests on eIPO system
  • Check and update KYC of SGB investors before placing early redemption requests on eIPO portal
  • Accept terms and conditions before placing early redemption requests
  • Ensure only eligible investors (those who applied in physical mode for respective series) participate

System Requirements:

  • Use eIPO system for placing redemption requests
  • Certificate number, units available, investor name, bank account, and IFSC code will auto-populate upon entering Investor ID and Investment Serial Number

Important Dates

SGB 2019-20 Series III (SGB192003R):

  • Start Date: January 14, 2026
  • End Date: February 3, 2026
  • Redemption Date: February 13, 2026

SGB 2019-20 Series IV (SGB192004R):

  • Start Date: February 13, 2026
  • End Date: March 6, 2026
  • Redemption Date: March 17, 2026

Status Check:

  • Trading members can check bid status tentatively after 6:00 PM on respective SGB Redemption Date based on RBI response

Impact Assessment

Market Impact: Minimal. This is a routine operational facility for specific SGB series holders who wish to exit their investments early after the mandatory five-year holding period.

Investor Impact: Provides liquidity option for physical SGB holders from 2019-20 Series III and IV who have completed five years of holding. Investors can redeem partially or fully during the specified redemption windows.

Operational Impact: Trading members need to ensure proper KYC verification and accurate data entry on the eIPO platform. The process is streamlined with auto-population of investor details upon entering Investor ID and Investment Serial Number.

Risk Considerations: Trading members must verify bank details carefully to avoid return of unpaid amounts. Modification and cancellation are only allowed during the redemption period, requiring timely action.

Impact Justification

Routine operational circular for specific SGB series redemption facility. Affects only investors holding physical SGBs from 2019-20 Series III and IV who wish to redeem early. No market-wide or trading member operational changes.