The government is introducing a gold monetisation scheme, which will replace the present gold deposit and gold metal loan schemes
Finance Minister Arun Jaitley on Saturday announced gold deposit accounts to utilise the 20,000 tonnes available within the country. He also announced launch of a sovereign bond as an alternative to buying the metal, moves that are likely to cut imports into the world's biggest gold consumer.
Jaitley said, "Stocks of gold in India are estimated to be over 20,000 tonne but mostly this gold is neither traded, nor monetized. The Gold Monetisation Scheme will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks and other dealers would also be able to monetize this gold."
India ships in 800-1,000 tonnes of gold a year despite massive stocks in the country that is neither traded nor monetised, Jaitley said.
According to the Finance Minister, the Government will commence work on developing an Indian Gold Coin, which will carry the Ashok Chakra on its face. "Such an Indian Gold Coin would help reduce the demand for coins minted outside Indian and also help to recycle the gold available in the country," he added.
Jaitley also announced development of an alternate financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold. He said, "The Bonds will carry a fixed rate of interest, and also be redeemable in case in terms of the face value of the gold, at the time of redemption by the holder of the Bond."