To cut down on the import bill, the Reserve Bank of India (RBI) on Thursday announced a gold monetisation scheme (GMS) that allows individuals, trusts and mutual funds to deposit gold with banks and earn an interest on it. Prime minister Narendra Modi will launch the scheme on November 5.
The RBI said the minimum deposit under the scheme should be raw gold equivalent to 30 grammes of 995 fineness. The central bank has not fixed a maximum limit for deposit.
The designated banks will accept gold deposits under the short-term (one to three years) bank deposit as well as medium-term (five to seven years) and long-term government deposit schemes (12 to 15 years).
There will be a provision for pre-mature withdrawal, subject to a minimum lock-in period and penalty to be determined by individual banks.
The GMS will replace the existing gold deposit scheme, started in 1999. However, the deposits outstanding under the old scheme will be allowed to run till maturity unless the depositors prematurely withdraw them.
The deposit certificates will be issued by banks in equivalence of 995 fineness of gold.
The principal and interest of the deposit under the scheme will be denominated in gold.
The short-term bank deposits will attract applicable cash reserve ratio and statutory liquidity ratio (SLR). However, the stock of gold held by the banks will count towards the general SLR requirement.
Business Standard, New Delhi, 23rd Oct. 2015
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