Priyanka
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On April 1, 2025, the price of gold in India reached an all-time high of ₹9,284 per gram. As a result, the total payout liability of the government under the Sovereign Gold Bond (SGB) scheme has increased significantly.
If all outstanding bonds were redeemed at current market rates, the government would have to disburse approximately ₹1.2 lakh crore (₹12,06,92,00,00,000)—excluding interest.
Outstanding SGB Value and Gold Holdings
According to a written reply by Minister of State for Finance, Pankaj Choudhary, as of March 20, 2025, the outstanding value for 130 tonnes of gold at the issue price is ₹67,322 crore.
The government has so far issued 67 tranches of SGBs, equivalent to 146.96 tonnes of gold.
SGB Scheme and Interest Payouts
Investors in SGBs receive 2.5% annual interest on their invested amount in addition to capital gains at redemption. Since the first tranche in 2015, gold prices have appreciated by 252%.
Investors in the first tranche received a 128% premium on their principal (excluding interest), and 148% when interest is included.
Staggered Redemptions, Not One-Time Payout
Although the overall redemption liability is high, the government does not need to settle the full amount at once. Each tranche of SGB has its own maturity timeline, with the final tranche set to mature in 2032.
To date, the government has completed payments for the first 7 tranches, and offered premature redemption for the 8th tranche.
Scheme Temporarily Discontinued Due to Costs
Earlier this year, the SGB scheme was paused by the government citing high borrowing costs. Despite its popularity among investors, the scheme has become more expensive for the exchequer as gold prices soar.
