New Delhi : The government will pay banks a 2.5 percent commission for mobilising gold under the gold monetisation scheme and depositors will be permitted premature withdrawal of the precious metal deposited, an official statement said on Sunday.
“The banks would be getting a 2.5 percent commission for the scheme which will include the charges payable to the collection and purity-testing Centres/Refiners," the finance ministry said in a statement on the gold monetisation scheme.
"It is expected that the modifications will make the scheme more attractive for potential depositors," it said.
As per the revised guidelines, the government will pay participating banks a fee services like gold purity testing, refining, storage and transportation on medium and long term gold deposits.
Premature redemption have been now permitted under medium and long-term government deposits.
The monetisation scheme encourages individuals, households and temples to deposit gold jewellery or bars with banks or collection agents. The gold deposited would be later refined for domestic purpose and would help cut dependence on imports.
"Any Medium Term Deposit will be allowed to be withdrawn after three years and any Long Term Deposit after five years. These will be subject to a reduction in the interest payable," the statement said.
Besides, gold depositors can now give the metal directly to the refiner, instead of only through the Collection and Purity Testing Centres (CPTCs).
"This will encourage the bulk depositors, including institutions, to participate in the scheme," the statement added.
The finance ministry said the gold monetisation scheme, launched by Prime Minister Narendra Modi last November, provides for tax exemptions on interest earned on the gold deposited and exemption from capital gains made through trading or at redemption.
Bureau of Indian Standards (BIS) has modified the licensing condition for refiners from the existing three years of refining experience to one year towards making the scheme more attractive, it added.
"BIS has published an Expression of Interest (EOI) on its website inviting applications from more than 13,000 licensed jewellers to act as a CPTC in the scheme, provided they have tie-up with BIS licensed refiners," the statement added.
The government has mobilised around 900 kg of gold in over two-and-a-half months' time through the scheme, which pays depositors interest of up to 2.50 percent per annum.
In an effort to make the scheme more customer-friendly, the Reserve Bank of India (RBI) said earlier this week that depositors will be able to withdraw medium-term (5-7 year) and long-term government deposits (12-15 years) pre-maturely after the minimum lock-in period, albeit with a penalty.
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do you really want to take a change. what if government changes the rules after you make your gold deposit.
Look at PSU.. why would one take that huge of risk.
The initiative taken by GOI to exploit the potential of domestic gold stock to country’s advantage, if pursued with will and determination, will have a great impact on the growth story of India. When credibility in the government’s ability to manage country’s resources without leakages is restored, temples and other institutions with whom large stock of the yellow metal lie idle will plough it back to mainstream economy. That is their interest also.
Centre is yet to institutionalise a system to manage country’s gold stock. Let us wait for the Budget 2016-17, for a formal announcement on this. RBI should quickly revisit the 1990’s proposal to establish a Gold Bank which can, as an apex body, coordinate the demand and supply sides of gold management professionally.