Benefits of gold monetization scheme by govt of india update 19th april, 20 16. Your 10point guide to gold schemes launched by pm narendra modi. Introduction of gold monetization schemes prime minister. Replacing both the present gold deposit scheme and gold metal loan scheme, this new scheme, introduced in the union budget for 201516 by union finance minister arun jaitley, will. Union cabinet approved the gold monetization scheme in september 2015 and reserve bank of india rbi issued the detailed guidelines reserve bank of india gold monetization scheme direction, 2015 for the implementation of the scheme on 22 october 2015. Under the sovereign bond scheme, gold bonds will be issued in rupees and denominated in 5 grams, 10 grams, 50 grams and 100 grams of gold. The proposed gms is going to hit some bedrock if not tackled properly. The gold monetization scheme was launched on 5 th november by the prime minister narenda modi. Read expert opinions, top news, insights and trends on the economic times.
Certain modifications were made to the scheme guidelines on 21 january 2016. Rates on gold deposit scheme under gold monetization scheme 2015. When one best buys a gold bond by depositing money he is issued a certificate by rbi on the behalf of government of india which is equivalent to 10gm of physical gold. However, the interest shall be paid in rupees annually on 31st march or. Gold monetization scheme earn tax free interest on your. However, whatever studies say, we indians are fond of gold. The scheme is known by the name gold monetisation scheme. The gold monetization scheme earns interest for your gold jewellery lying in your locker. Extracts from cbdts manual of office procedure, voli, february, 2003. The catch in this scheme is to mobilize and channelize large chunks of stashed gold held by indian households and institutions in the country so as to slash the number of imports of the yellow metal which is continuing to create. The latest gold monetization scheme launched in 2015 is part of this long tradition. The available secondary data was extensively used for the study. In gold monetisation scheme, gold in any form can be deposited with banks for a period of one to 15 years. The drop in gold price may result in out of proportion increase the demand which will defeat the whole purpose of launching this scheme.
It pays the depositor of the gold a fixed rate of interest. Government wanted to mobilize this idle asset and put it back to productive use. Gold monetization in india as a transformative policy iima. To turn this unused gold into a productive asset, the government of india launched the gold monetisation scheme gms. This is a drain on its forex reserves, and is a key reason why the rupee value falls. There are many positives for depositing the gold under the gold monetisation scheme. Reserve bank of india gold monetization scheme, 2015 master direction. The rbi had tweaked the regulations for the gold monetisation scheme back in june last year to make it more lucrative. In gold monetization scheme, gold is mobilized from households and institutions of the country to facilitate its use for productive purposes, and. The scheme allows banks customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2. The scheme was launched by the prime minister of india in 2015 with an aim to mobilise gold and facilitate its use for productive purposes, which further will also help in reducing indias dependability on gold imports. Thus, the gold monetization schemes comprise of the revamped gold deposit. Gold monetization scheme, gold sovereign bond scheme and gold coin and bullion scheme rbi, 2015.
Pm modi launches gold monetisation scheme and indias. Gold heads for first samvat gain in 3 yrs, business standard, 17. The gold monetization scheme was first launched by the indian government to tackle the issue of tons of yellow metal lying idle in the indian households. But instead of that, you could keep your gold in any form in a gold monetisation scheme account and earn interest as the.
Quick guide to gold monetization scheme investment lawguage. Gold monetisation scheme key features and how it works. The guidelines of thegold monetization schemesgms will be as under. Pdf gold monetization scheme will it meet with success. Sovereign gold bond scheme is aimed at customers looking to buy gold as an investment. This gold will earn interest and redemption will be at the prevailing market value at the end of the tenure of deposit. The scheme provides the dual benefit of, interest denominated in gold on the gold deposited and an option of encashing the gold at maturity. Jul 03, 2015 gold monetization scheme the tenure of gold deposits is likely to be for a minimum of one year, with breaking of lockin period facility similar to your fixed deposit accounts. The gold monetisation scheme enables individuals households and institutions to deposit their gold holdings with the banks by earning interest. The gold monetization scheme looks more suitable to the people having physical gold as investments in the shape of coins or bars. Customer bringing gold jewellery to the cptc will be treated with dignity.
Gold monetization scheme current affairs analysis and latest and specific current affairs for ias prelims 2019, upsc weekly current affairs, ias current affairs compilation and current affairs for. To provide the customers an opportunity to earn interest income on their idle gold holdings. The gold monetization scheme is basically a new deposit tool to ensure mobilization of gold possessed. Gold monetization scheme standard operating procedure for collection and purity testing of jewellery receipt of jewellery 1.
All the scheduled commercial banks except the rrbs are authorised to implement the scheme. Under the scheme, individuals can submit gold to a purity testing centre and then to a collection centre. Rbi tweaks eligibility criteria for gold monetisation. Achilles heel of the earlier gold deposit scheme was related to the delivery of the physical gold.
Pradhan mantri gold monetization scheme pradhan mantri. The reserve bank of india rbi has made changes in the gold monetisation scheme to make it more attractive. Hence, i feel many individuals will stay away from this scheme only because of this feature. The adoption of gold monetization scheme gms has recently been announced by the finance minister of india arun jaitley. Introduction of gold monetization schemes 09 sep, 2015 the union cabinet chaired by the prime minister, shri narendra modi, today gave its approval for introduction of gold monetization schemes gms, as announced in the union budget 201516. Just utilize the huge idle gold with indians, government of india about to launch the gold monetization scheme. Revamped gold deposit scheme r gds personal banking. The new gold monetization scheme will offer an interest rate of up to 2. Aug 26, 2015 gold monetisation scheme entails keeping the gold with bank for fixed tenure and bank returning the gold with nominal interest in form of money or gold.
Experts have critically analyzed all the aspects of these schemes and they have concluded that if not properly tackled then this scheme will create many types of difficulties. So one can deposit his gold lying idle in bank lockers by earning interest at the same time. Revamped gold deposit scheme r gds is in the nature of a fixed deposit in gold. Oct 16, 2016 the gold monetization scheme was launched on 5th november by the prime minister narenda modi. First, it will reduce the dependence on imported gold. Unless the gold monetization scheme addresses the emotional attachment of investors with physical gold and shows any significant improvement over the previous gold deposit scheme. Scheme gold monetization scheme, 2015which includes r evamped gold deposit scheme rgds and revamped gold metal loan scheme rgml. Gold monetisation scheme, gold sovereign bond scheme and gold coin and bullion scheme central government schemes 2017 part 12 in telugu like us on facebook for real time updates.
Gold monetisation scheme what is gold monetisation scheme. In exercise of the powers conferred on the reserve bank of india under section 35a of the banking regulation act, 1949, the rbi makes the following amendments in the. Gold monetization schemeearn taxfree interest from your gold. However, in this scheme the biggest negative point is melting of gold. Objective the objectives of the gold monetization scheme are. Gold monetization scheme current affairs ias prelims exam. Gold monetisation scheme details and critical analysis. The customers can deposit their idle gold under r gds which will provide them safety, interest earnings and a lot more. Sovereign gold bond scheme vs gold monetization scheme.
The gold monetization scheme has two major benefits. Option d gold monetization scheme was launched by government of india in 2015 and managed by reserve bank of india. Short term bank deposit stbd the deposit of gold made under the gms with a designated bank for a short term period of years. Therefore, gold monetization scheme is a good news for people who are waiting to buy gold at the lower price provided the scheme is a success. By depositing it with bank in gold deposit account one can earn on these gold holdings and also take back the gold. How to check the purity of gold to be deposited in the scheme. Prime minister narendra modi launched three gold related scheme viz gold monetization scheme gms, sovereign gold bond scheme sgbs and indian gold coins igc these ambitious schemes were launched to reduce the physical demand for gold and fish out 20,000 tonnes of the precious metal lying idle with households and institutions. May 20, 2015 while announcing several steps for monetising gold in his budget 201516, union finance minister arun jaitley stated that stocks of gold in india were estimated to be over 20,000 tonnes but mostly. The gold monetization scheme is basically a new deposit tool to ensure mobilization of gold possessed by various families and institutions in india. The general public can share their views on draft gold monetization scheme on or before 2nd june, 2015. Gold monetisation scheme gms is in the nature of a term deposit in gold. Therefore, along with the capital appreciation in gold.
Dec 22, 2015 the gold monetization scheme gms gold monetization scheme gms is a welcome step initiated by the government of india to unlock the unused and idle gold lying in households and institutions and bring them into mainstream and release the capital locked in for use in the economy for its development. Gold monetisation scheme was introduced to replace the existing gold deposit scheme gds, 1999. Discuss the terms of the schemes and steps announced for depositors of gold to earn interest in metal accounts in recent times and critically evaluate the gold monetisation scheme. May 21, 2015 because, we deposit the gold in the format which we are currently holding. The gold monetization scheme was launched on 5th november, 2015 by the prime minister of india mr. Gold monetization scheme why was it introduced in india. Gold monetisation scheme gms central government policy. Gold monetisation scheme is a scheme that allows depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal accounts. The main features of gold monetization scheme are given hereunder. Bringing gold depositors under income tax scrutiny in the proposed gold monetization scheme will prevent money laundering, but this may also keep genuine depositors away from the scheme. Jan 15, 2016 gold monetisation scheme aims to mobilize inactive purchasing power stored in the form of gold with the public. The gold monetization scheme is the scheme launched by the central government of india on 5th november 2015 under the leadership of prime minister shri narendra modi. Monetization scheme gms by the government of india goi, 2015.
The short term deposits shall be treated as banks onbalance sheet liability. The deposit will be denominated in grams of gold with purity 995. India is the worlds largest consumer of gold but has to import about 97% of its annual gold demand. The shortterm deposits should be treated as banks onbalance sheet liability, the rbi said in a notification. All you need to know about gold monetisation scheme the hindu. Pradhan mantri gold monetization and bold scheme 2020. Temple gold is actually a small proportion but it is a low hanging fruit.
India control its deficit while not coercively controlling its. To mobilize the gold held by households and institutions in the country ii. We would like to show you a description here but the site wont allow us. Gold monetization scheme 2015 details of branches authorized to accept deposit of gold under the scheme. Find relevant answers to frequently asked questions gold monetisation scheme at icici bank answers. In this scheme prices of gold bond is linked to actual gold prices prevailing in market that time and interest of 2 to 3% will be given by government. All scheduled commercial banks excluding rrbs will be eligible to implement the scheme. Central government scheme part 12 gold monetisation. The deposit will help the depositor earn interest at the rate of interest decided by central government and notified by reserve bank of india from time to time.
Candidates can also download the notes pdf at the end of this article. September 22, 2016 the effectiveness, the allnew gold monetization scheme of the central government is still somehow doubtful. You will not agree, but studies showed that gold is more volatile than stocks and give you a return of debt products. First, a very large proportion of the gold holdings exists as jewelry with individuals. Unless the gold monetization scheme addresses the emotional attachment of investors with physical gold and shows any significant improvement over the previous gold deposit scheme it is likely to fail. Gold monetization scheme gms updated banking school. Broken jewellery or jewellery that you dont want to wear can earn interest for you in gold. This creates an allindia loco stock that would facil itate lending by banks to jewellers. Benefits of gold monetization scheme by govt of india. Gold monetisation scheme is an important scheme started by the government of india and is equally important for the ias exam.
Capital market services branch, central bank building, ground floor, 55, m g road, fort, mumbai 400001. Recently goi released the draft of gold monetization scheme. The scheme is designed to help you earn interest on your unused gold lying idle in bank lockers. Gold monetization scheme 2015 central bank of india. The minimum quantity of deposits is pegged at 30 grams to encourage even small deposits. Quick guide to gold monetization scheme investment the gold monetization scheme gms is a new scheme introduced by the indian government in the year 201516. The pradhan mantri gold monetization scheme was launched to attract the 20k tons of gold saved in indian temples, institutes and households into banking system. Under the gold monetisation scheme, individuals can deposit a minimum of 30 gram gold in bullion or in the form of jewellery with the bank for a year and earn tax free interest. Gold monetization scheme was launched by government of india in 2015 and managed by reserve bank of india. Gold monetisation scheme details and critical analysis question gold monetisation scheme was announced in the budget 20152016.
The aim of the scheme is to safeguard the gold, which is kept in the households of india and to put it. The gold invested in the gold monetization scheme earns you an additional annual interest of up to 2. Rates on gold deposit scheme under gold monetization scheme 2015 short term bank deposit scheme 1 year 3 year 0. What are the disadvantages of the gold monetisation scheme. The recent gold bond scheme and gold monetization scheme can help deepen the financial sector. The revamping of the scheme is aimed at enabling people to open a hasslefree gold deposit account. The objective of introducing the schemes is to mobilise gold held by households and institutions. To mobilize the idle gold in the country and put it into productive use. In exercise of the powers conferred on the reserve bank of india rbi under section 35 a of the banking regulation act, 1949 and in pursuance of the central government notification issued vide office memorandum f. A platform for citizen engagement towards good governance in india. How to make the gold monetisation scheme successful. But instead of that, you could keep your gold in any form in a gold monetisation scheme account and earn interest as the price of the precious metal goes up. Resident indians can deposit gold under gold monetisation scheme. Nov 06, 2015 prime minister narendra modi launched three gold related scheme viz gold monetization scheme gms, sovereign gold bond scheme sgbs and indian gold coins igc these ambitious schemes were launched to reduce the physical demand for gold and fish out 20,000 tonnes of the precious metal lying idle with households and institutions.
Reserve bank of india department of banking regulation. After siddhivinayak m andir and shirdi sai baba temple, tirupati balaji temple has also give positive node to deposit 1,311 kg gold in gold monetization scheme. Gold monetization scheme gms which includes the revamped gold deposit scheme gds and revamped gold metal loan scheme. In the union budget speech of 201516, an announcement was made and it was proposed to introduce a gold monetization scheme. Nov 05, 2015 prime minister narendra modi on thursday launched the first ever india gold coin bearing ashok chakra in a move to cash in on the festive season of diwali and dhanteras which is an auspicious. As usual my financial planner friends passed their verdict on the gold monetization scheme even before it is launched. And like all other attempts, this one too will fail. You would generally keep your gold without any security at home or store it in bank lockers by paying a maintenance fee. While announcing several steps for monetising gold in his budget 201516, union finance minister arun jaitley stated that stocks of gold in india were estimated to be over 20,000 tonnes but mostly. The aim of the scheme is to safeguard the gold, which is kept in the households of india and to put it to some productive use. All you need to know about gold monetisation scheme the.
The catch in this scheme is to mobilize and channelize large chunks of stashed gold held by indian households and institutions in the country so as to slash the number of imports of the yellow metal which is continuing to create a huge burden on the forex reserves. The deposit will help the depositor earn interest at the rate of interest decided by central government. Rbi amends gold monetisation scheme to make it more. Scheme gold monetization scheme, 2015 which includes revamped gold deposit scheme rgds and revamped gold metal loan scheme rgml. This scheme can attract 400 gm of gold in first 2 weeks this can be like poor response to pradhan mantri gold monetization scheme. Gold monetization scheme and bond scheme download pdf. To be able to reduce reliance on import of gold over time to meet the domestic. Under this gold monetization scheme a customer who possesses gold can deposit their gold in any form in a gms account to earn interest as the price of the gold.
Operational issues details purpose the purpose of the scheme is to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in long run, reduce the countrys reliance on import of gold. To provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks. Research methodology the present research paper is an attempt of descriptive research, based on the secondary data sourced from various research papers, journals, magazines, articles and media reports. May 14, 2016 benefits of opening an account for the gold monetisation scheme. Short term bank deposit stbd the deposit of gold under the made gms with a designated bank for a short term period of years. Through these schemes, in addition to targeting individuals, the government is pursuing temples with renewed focus to mobilize gold reserves. Gold monetisation scheme is like a gold savings account. The minimum quantity of gold that a customer can deposit is proposed to be 30 grams. The gold monetisation scheme was launched with the tagline earn, while you secure. The customers can deposit their idle gold under gms which will provide them safety. May 26, 2015 the scheme could potentially and significantly reduce indias gold imports as the countrys vast gold stocks estimated at 20,000 tons can be recycled to meet the ever growing jewelry demand. The scheme is known by the name gold monetisation scheme, 2015 how it works.