GOLD MONETIZATION SCHEME

This scheme is to mobilize

gold held by households and
institutions within the country
and put them to productive use.
The scheme aims to bring
down the import of gold within
the future. It is a gold savings
account which will earn
interest for the gold that you
simply deposit in it. This gold 20,000 tonnes of the valuable metal lying idle with
households and institutions .The aim of this scheme
will then earn interest based on
is to allow you to earns some regular interest on
gold weight and also the your gold and save you from carrying
appreciation of the metal value.

Earn, while you secure cost .Indian household & institutions hold nearly
20,000 tons of gold. Mobilization even a small
What is Gold Monetization percentage of this mostly-unused gold reserve will
Scheme?

G
significantly to reduce India’s gold import. It will
boost up Indian economy when more money will be
available in market
old Monetization Scheme was
launched by the Prime Minister
Narendar 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.

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
Person Eligibility 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 urge your assets tested at the
PTC, which can will issue you the certificate
about the value of your gold. After getting
the certificate from the authorized PTC

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 e.g. if
the certificate says 30gm, bank will credit
30 gm in investor account
 Investor have to select the tenure
 Select the type of redemption – in gold or
money
 Investor have to  pay service charges to
banks like gold purity testing charges,
refining, storage and transportation charges
etc. for Medium and Long-term Deposits.
Large depositors can also prefer to directly
deposit it with refiners.
 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

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's 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

3. Know your customer

Bank will ask the investor for a KYC details

How the gold monetizations help to

decrease import of gold?
Types of Deposits: Gold monetization does not directly reduce
The banks will accept three types of gold deposits such as:
import of gold but instead, it brings into the
Types of Deposits Tenure 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
1. Short Term Bank 1-3 years economic value. And India has a great demand
Deposit for consumption purpose gold, thus puts
2. Medium Term Bank 5-7 years pressure on Bop account. Inviting people to
Deposit save their gold with banks will allow the
3. Long Term Bank 12-15 years government to bring this hoarded gold to
Deposit
economic use. Thus, indirectly reducing the
demand for imports, as some demand can be
fulfilled through using these gold savings.
Interest Income
Current changes in scheme
 In November 2019, RBI liberalized the GMS
2015.
 The GMS scheme had been able to garner
only 16 tonnes deposits in last four years
 Allow depositors to directly deposit their
bullion with either banks refiners or
collection and purity testing centers. Earlier,
the banks 9CPTCs and Refineries had to sign
a tripartite agreement.
 Temples, High Net-worth Individuals (HNIs)
and entities like Fund houses Trusts and
even government entities would now find it
easier to deal directly with banks instead of
CPTCs.