Sovereign Gold Bond: PNB issues notice for investors on SGB maturity amount, interest. Check details 

SGB maturity: Punjab National Bank (PNB) has asked Sovereign Gold Bond (SGB) and RBI Bond investors to visit their respective bank branches if they haven't received their interest and whose bonds have matured or are about to mature. The bank has asked the customers to verify their bank accounts within 5 days to seamlessly receive the interest. 

In a social media post on X, PNB said: "All Sovereign Gold Bond (SGB) and RBI Bond investors of PNB, particularly those whose interest is not paid and whose bonds have already matured or going to mature are requested to visit their respective bank branches and verify their bank accounts within 5 days. In case of wrong account number or closed account number bank will not be liable for any delay. In case of unclaimed interest or principal more than 6 years, customers have to follow RBI guidelines as mentioned on the RBI website.”

It further noted: “Further it is requested not to close their operative account till redemption. In case of urgency for closure of operative account, please provide alternative account details before proceeding for operative account closure failing which redemption and interest amount will not be credited.”

As per RBI guidelines, if the interest or redemption amount is not claimed within 30 days of the due date, the listed entity must transfer the funds to an Escrow account within 7 days after the 30-day mark. Any unclaimed amount remaining after 7 years will be transferred to the IPEF by the Treasury Department, along with any accrued interest. Unclaimed funds allocated to the IPEF will be refunded to eligible and identifiable investors who submit a claim to the Fund.

What are SGBs?

Sovereign Gold Bonds (SGBs) are fixed-income government securities that are denominated in grams of gold, providing investors with a convenient alternative to holding physical gold. Investors are required to pay the issue price of the bond in cash, and upon maturity, the bonds will be redeemed for cash. These bonds are issued by the Reserve Bank of India on behalf of the Government of India, offering investors a secure and reliable investment option.

The RBI hasn't issued any new tranche for Sovereign Gold Bonds for a while now. Investors have the opportunity to acquire Sovereign Gold Bonds (SGBs) through two avenues - the primary market and the secondary market. In the primary market, investors can purchase SGBs when the government announces subscription periods. On the other hand, in the secondary market, investors can trade SGBs on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) after their initial issue through the primary market.

What is the SGB redemption process?

The bond has a tenure of 8 years, but early redemption is permitted after the fifth year on coupon payment dates. Investors will receive a reminder one month before the bond matures. On the maturity date, the proceeds will be deposited into the bank account on file. Any changes to account information or contact details must be promptly communicated to the bank/SHCIL/PO.

The bond nominee(s) should contact the relevant Receiving Office to submit their claim. The nominee(s) claim will be recognized as per the Government Securities Act, 2006, and Chapter III of Government Securities Regulation, 2007. In the absence of a nomination, the claim can be made by the executors or administrators of the deceased holder or the holder of the succession certificate (issued under Part X of Indian Succession Act) at the Receiving Offices/Depository.

It should be noted that these provisions also apply to cases involving a deceased minor investor. In such instances, the bond title will transfer to the individual meeting the criteria outlined in the Government Securities Act, 2006, rather than the Natural Guardian.

Premature redemption

The RBI has recently disclosed the timeline for the early redemption of sovereign gold bonds (SGB) that were issued from May 2017 to May 2020. Per the RBI's outlined schedule, a total of 30 SGBs are scheduled for redemption, commencing on October 11 and concluding on February 7, 2025. The redemption value of these bonds will be decided by the RBI, factoring in the average gold price observed in the three days leading up to the maturity date.