Fixed Income
Highlights of gold deposit and bond schemes
Highlights of the two gold schemes approved at a cabinet meeting chaired by Prime Minister Narendra Modi:

Key points of gold deposit scheme

- Minimum amount of gold set at 30 grams
- The 331 designated centres to test and collect gold from customers
- Gold can be in any form, bullion or jewellery
- A Gold savings account to be opened by customers
- Account to be denominated in grams of gold
- Centres to transfer gold to refiners
- Refiners to keep the gold in ware-houses unless banks want to hold themselves
- Refiners to be paid a mutually-decided fee by banks
- Customer will not be charged.
- Scheme available for short-, medium-, long-term periods
- Lock-in period can be broken with penalty
- Interest rate for short-term deposits to be decided by banks
- For medium- and long-term deposits, interest rate to be decided by government
- Interest rate to be denominated and payable in rupees, based on gold value
- Redumption of short-term deposits in cash or in gold
- But fractional quantity to be paid in cash
- Redumption of medium and long-term deposits only in cash
- Deposited gold can be utilised for auctioning, Central bank's gold reserves, coins, lending
- Tax exemptions will also be extended as applicable
- Gold reserve fund to be created based on borrowing cost interest rate paid 
- For jewellers, a gold metal loan account can be opened, denominated in grams of gold
- Gold mobilized under short-term option to be provided to jewellers on loan
- Delivery of physical gold for jewellers once sanctioned.

Key points of sovereign gold bond scheme 

- Bonds to be issued on payment of rupees and denominated in grams of gold 
- They will will have a sovereign guarantee
- Issuing agency to pay distribution costs and commission to intermediaries
- These will be reimbursed by the government
- Scheme restricted to resident Indian entities
- The cap on bonds per annum no more than 500 grams per person
- Rate of interest to be decided by government, based on market conditions 
- Bonds in dematerialised and paper form
- Denominations of 5, 10, 50, 100 grams of gold 
- Price may be drawn from reference rate of the central bank towards the scheme
- Notified agencies, like banks, post offices, and non-banking firms may collect/reem money
- The tenor of the bonds for five-seven years
- Bonds can also be used as collateral for loans
- Bonds to be easily sold and traded on exchanges 
- Capital gains tax same as that for physical gold for individuals
- Capital gains tax to adjust for inflation
- Amount received can be used by government like borrowings
- On maturity, redemption in rupee amounts alone
- Interest rate to be calculated on value of gold at investment
- Principal amount to be redeemed at the then price of gold
- If price has since fallen, depositor can roll-over the bond for three or more years 
- Deposit will not be hedged and all risks will be borne by government
- But position may be reviewed in case "Gold Reserve Fund" becomes unsustainable 
- Bonds to b sold by post offices, banks, non-banking firms, upon commission. 



Government approves Rs.800 crore capital infusion in EXIM Bank
The government on Wednesday approved capital infusion amounting to Rs.800 crore in the Export Import Bank of India (EXIM) in an effort to better promote the country's international trade.
The approval was given by the union cabinet which met here.
According to the cabinet, the funds were approved under the "Demands for Grants" to support the future growth of the bank.
The statutory corporation was set up in 1982 to provide financial assistance to exporters and importers.
Furthermore, it functions as principal financial institution for coordination between institutions which are engaged in financing export and import of goods and services.


What Really Are ‘Crossovers’?
Other than something indefinable, Crossovers have an illusionary ‘presence’
I had a quick look at the new Suzuki S-Cross. This is from the ‘crossover’ segment—whatever that means—because the fact remains that most ‘crossover’ cars in India bear more resemblance to the Hindustan Motors’ Landmaster of the 1950s and early 1960s than anything modern. Higher road clearance, some elements of more space inside (especially in the height department), a reasonably sized cargo area and bigger wheels as well as tyres.
Who, then, are these ‘crossovers’ really aimed at and what do they have which standard hatchbacks also in the sub-four-metre range do not have? Other than something indefinable which does not fool anybody, they have an illusionary ‘presence’, aided by rear-ends designed to look bigger than they really are by addition of elements like wider tail lamps (eating into hatch entry dimensions) and, sometimes, a spare wheel dangling from the rear hatch (will do wonders to the hinges very soon). The addition of stronger side-bars and, in some cases, design changes for side impact protection tend to reduce the horizontal space inside some of these ‘crossovers’. So while they are rated for driver+4, they are actually good for driver+3.
Coming back to the Suzuki S-Cross, I think it will do well, but not because of the exclusive dealerships. It will do well because, to all first appearances, the interiors are brilliant, in many areas matching what one sees in cars from Germany of the same sizes, costing three times as much. And the doors make that solid ‘thunk’ sound too. That, to me, is the most important part. The Suzuki S-Cross feels solid—like the Landmaster used to feel.

Ford Is ‘Different’

There is good news for drivers looking for vehicles adapted for differently-abled people. First, on the vehicle: Ford India has been working closely with two people I know, Deepa Malik (in Delhi) and Salil Chaturvedi (in Goa), along with some other people all over the country, for supplying specially modified Ford Ecosport cars in Ecoboost engine version with automatic transmission. This sort of cooperation by a manufacturer has been seen after a gap of almost 15-20 years; the last time this was enabled by Maruti Suzuki; then, in between, there has been a hiatus. 
Second, on the registration of a vehicle for differently-abled people as well as getting specific driving licences and the resultant concessions on road tax, excise duty and some other levies, both report good cooperation from the authorities in Delhi as well as in Goa. Here again, the level of cooperation varies from state to state and, often, down to individual Regional Transport Offices (RTOs).
Our differently-abled friends need all the support from the authorities and, towards this, the Delhi RTO has also been running a specific DL-1D series registration number, to remove all confusion for which vehicles are entitled to benefits, including preferential parking. Good work by Ford in India, too, and let’s see some of the other larger manufacturers provide the same level of support too.

French Connection

Tata first approached the French after World War II for truck technology; but, not making any headway, they settled for Mercedes-Benz which was then recovering from huge War-based losses and damage. Ever since, the French brands appear to have had major problems in establishing themselves in India, despite many efforts.
Even the Duster (of Renault) comes from the Dacia (Romania) stable. Peugeot managed to right royally mess matters up when they allied with Premier Automobiles in the 1980s and never looked as though they could stand up again. Renault is now trying to launch a small car called, of all things, the ‘Kwid’. After the X-Creta and S-Cross jokes doing the rounds, expect a whole new series here, while the car itself will sell only if the price is around Rs3 lakh for a loaded version, from what I hear.
(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved in helping small and midsize family-run businesses re-invent themselves.)



Anand Vaidya

2 years ago

I have also been wondering about the issue of crossovers. If hatchbacks are the donkeys and true SUVs are horses, crossovers are the mules. :-(

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