GOLD MONETIZATION SCHEME
Mobilization
Earn, while you secure.
The Gold Monetization Scheme was launched
by the Prime Minister Narenda Modi on 5th
November. It is a great opportunity for big
Indian households to make profits from the old
jewelry lying in lockers .This new gold
scheme may be a modification of the
prevailing Gold Deposit Scheme (GDS) and Gold
Metal Loan Scheme (GML), and it
might replace the prevailing Gold Deposit
Scheme, 1999.
What is Gold Monetization
Scheme?
The Gold Monetization Scheme is a savings
account for gold. Here investor deposit there
gold with the bank and therefore
the corresponding value of gold gets credited to
your account. On this account investor can
furthermore may earn interest along aside the
capital appreciation that comes with the change
in price of gold.
Why Gold Monetization Scheme?
The aim to launched a schemes were to scale
back the physical demand for gold and fish out
20,000 tonnes of the valuable metal lying idle
with households and institutions .The aim of
this scheme is to allow you to earns some
regular interest on your gold and save you from
carrying cost .Indian household & institutions
hold nearly 20,000 tons of gold.
even a small percentage of this mostly-unused
gold reserve will significantly to reduce India’s
gold import. It will boost up Indian economy
when more money will be available in market
Eligibility Criteria for gold
Monetization:
 Individuals – singly or jointly
 HUFs (Hindu Undivided Families)
 Trusts like Mutual funds/
Exchange Traded funds registered
under SEBI
 Proprietorship& Partnership firms
 Charitable institutions
 Central government, state
government or other entity owned
by the central government or the
state government.
What investor required to
Deposits?
Under the scheme minimum deposits to be
made at a time are going to be 30 grams of raw
gold (bars, coins,) like 30 grams of gold o f 995
fineness.
How to invest?
1. Purity verification & deposit of gold
 To register under the gold monetization
scheme, you need to visit the
authorised Purity Testing centre near
your location. It is crucial to get your
assets tested at the PTC, which will
issue you the certificate about the value
of your gold.
 After getting the certificate from the
authorized PTC
 How bank monetizes the gold?
It can use several options to monetize gold or to
convert it into money. An important one is to
sell the gold to a jeweler. Interested jewelers
can approach the bank for availing a ‘gold loan’.

The bank can use the gold for other types of

activities like buying of foreign currencies and
keeping the gold as part of CRR/SLR
requirements.

For the successful implementation , the gold

deposit scheme requires coordination between
the different agencies involved. The Gold
Deposit Scheme hence makes a mandatory
MoU between Banks, Purity Testing centres and
the Refiners regarding the execution of the
programme.

2. Open a gold saving bank account

 Investor need to approach a bank to
open a gold saving account
 It will credit the gold in quantity. For eg
if the certificate says 30gm, bank will
credit 30 gm in investor account
 Investor have to select the tenure
Types of Deposits:
 Select the type of redemption – in gold
The banks will accept three types of gold
or money
deposits such as:
 Investor have to  pay service charges to
The Short Term Bank Deposit (1-3 years)
banks like gold purity testing charges, Medium Term Government Deposit Schemes
refining, storage and transportation (5-7 years)
charges etc. for Medium and Long-term Long-Term Government Deposit Schemes
Deposits. Large depositors can also (12-15 years)
prefer to directly deposit it with
refiners.
3. Know your customer
Interest Income
Bank will ask the investor for a KYC details
STBD: The current interest rates are as under:
For 1 year : 0.50% p.a.
Above 1 year - 2 years: 0.55% p.a.
Above 2 years- 3 years : 0.60% p.a.
The interest earned on these deposits will be
decided by the Central
MTGD: 2.25% p.a.
LTGD: 2.50% p.a.
How bank utilize accumulated
gold?
 Lending to jewelers
 Invite foreign currency inflow
 Use gold to meet CRR & SLR Require
Pros of Gold Monetization Scheme
 Income from gold certificate scheme is
exempt from tax
 No need to fear of loss of theft
 Generate regular income from Gold, at
the same time get the benefit of regular
increases in price of gold
 Save tax as there is no tax on capital
gains.
Cons of Gold Monetization Scheme
 Interest rate for gold scheme
is too low
 Investor can
’t get back the original model
of gold jewelery
 The money investor invested
in gold jewelery , if it is kept
in fixed deposit , would have
fetched investor more returns
How the gold monetisation help to
decrease import of gold?
Gold monetization does not directly reduces
import of gold but instead, it brings into the
money flow the gold deposits that are kept with
households. Gold kept in the form of jewellery
or savings at one's place does not yield any
economic value. And India has a great demand
for consumption purpose gold, thus puts
pressure on BoP account. Inviting people to
save their gold with banks will allow the
government to bring this hoarded gold to
economic use. Thus, indirectly reducing the
demand for imports, as some demand can be
fufilled through using these gold savings.
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