RBI’s gold reserves hit record $102 bn, SGBs deliver 338% return in eight years
New Delhi: India’s gold reserves have surpassed $100 billion for the first time, buoyed by a sharp rally in global bullion prices even as the Reserve Bank of India (RBI) slowed its pace of purchases this year. According to RBI data released on Friday, the country’s gold holdings rose by $3.595 billion to $102.365 billion in the week ending October 10, while overall foreign exchange reserves fell $2.18 billion to $697.784 billion.
Gold now accounts for 14.7 per cent of India’s total reserves — the highest since 1996–97 — nearly double its share a decade ago, when it stood below 7 per cent. The rise is largely driven by valuation gains amid surging global gold prices. “The share of gold in India’s foreign exchange reserves has increased significantly, largely driven by valuation gains from the rising gold price,” said Kavita Chacko, research head for India at the World Gold Council.
The milestone comes even as the central bank’s buying has slowed considerably. The RBI purchased gold in only four of the first nine months of 2025, compared with near-monthly additions in 2024. Between January and September 2025, total purchases stood at just 4 tonnes, sharply lower than 50 tonnes in the same period a year earlier, according to World Gold Council data.
Globally, gold prices have jumped about 65 per cent in 2025, fuelled by macroeconomic uncertainty, geopolitical tensions, and a wave of reserve diversification away from the U.S. dollar. Central banks worldwide have continued to accumulate gold amid rising sanctions risks and de-dollarisation efforts. India, the world’s second-largest consumer of gold, depends heavily on imports to meet domestic demand, where the precious metal remains both a cultural symbol and a preferred investment.
At the retail level, investors have also benefited handsomely from the rally through instruments such as the Sovereign Gold Bond (SGB) scheme. The SGB 2017–18 Series III, which matured on October 16, 2025, delivered a remarkable 338 per cent return over its eight-year tenure — the highest among all SGB tranches so far.
The bonds were issued between October 9 and 11, 2017, at Rs 2,866 per gram, and the RBI has fixed the final redemption price at Rs 12,567 per gram, based on the average market rate published by the India Bullion and Jewellers Association (IBJA) for October 13–15, 2025. This translates into a total gain of Rs 9,701 per gram, excluding the fixed 2.5 per cent annual interest that investors have been receiving semi-annually.
Each SGB carries an eight-year tenure, with an option for premature redemption after five years. Over the past five years, numerous SGB series have matured or become eligible for early exit. Between April and September 2024, the RBI processed 26 series for premature redemption, covering tranches from 2016–17 to 2018–19. In its April–September 2025 schedule, 33 series were lined up for redemption, extending to issues from 2020–21.
Several of the earliest tranches, including the November 2015 issue, have now completed their term, with investors receiving final payouts.
