Ministry :- Ministry of Finance
Objective :
- To mobilize gold held by households and institutions of the country and facilitate its use for productive purposes.
- In the long run, to reduce country’s reliance on the import of gold.
Salient Features :
- The scheme allows banks’ customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2.25-2.50%.
- The scheme could also be availed by charitable institutions, the central government, the state government or any other entity owned by the central government or the state government, apart from individual and joint depositors.
- Scheme provides different options to the people to monetize the gold, by modifying the already existing two schemes, namely ‘Revamped Gold Deposit Scheme’ and the ‘Revamped Gold Metal Loan’ scheme.
- All scheduled commercial banks (excluding RRBs) have been allowed to implement the scheme.
- The minimum deposit at any one time shall be 30 grams of raw gold (bars, coins, jewelry excluding stones and other metals). There is no maximum limit for deposit under the scheme.
- Tax exemptions under the GMS include exemption of interest earned on the gold deposited and exemption from capital gains made through trading or at redemption.
- Earlier, customers had to first approach the collection and purity testing centres (CPTCs) which issued depositors purity certificate on gold deposited. But later on RBI liberalized this rule and Banks may accept the deposit of gold at designated branches at their discretion.
Tenure:
- Short term: 1 to 3 years (Deposits are allowed for broken periods. For ex – 1 year 3 months, 2 years 5 months 3 days etc.)
- Medium term: 5 to 7 years (Broken period is allowed)
- Long term: 12 to 15 years (Broken period is allowed)
Principal and interest in short term shall be denominated in gold while in middle term and long term principal is denominated in terms of gold but interest shall be calculated in Indian rupees with reference to the value of gold at the time of deposit
Rate of interest
- Short term – Designated banks are free to decide the rate of interest.
- Medium term – 2.25%
- Long term – 2.50%
Lock – In period
• Medium term – 3 years
• Long term – 5 years
What government will do of this deposited gold?
- Under short term deposits accumulated gold can be used to maintain SLR
- Under medium and long term deposit, the gold received are auctioned by the notified agencies and sale proceeds are credited to government’s accounts with RBI
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