The Gold Monetization Scheme allows Indians to deposit physical gold in bank accounts, where it earns interest. The scheme aims to mobilize gold holdings and reduce gold imports, while providing gold loans to jewelers. Depositors receive certificates stating the amount and purity of gold deposited, which can be used for short, medium, or long-term bank deposits earning 2.5% annual interest. The deposited gold is lent by banks to jewelers at a higher interest rate than paid to depositors.
3. Gold Monetization Scheme (GMS) is a gold savings account that anyone can open with
any bank of their choice. It allows you to benefit from the value in your gold holding by
earning interest, which is calculated on the basis of gold’s weight rate prevailing on the
date gold deposit was made. Physical gold in any form, i.e., ornaments, coins or bars is
allowed to be deposited in the account.
The objective is to simultaneously safeguard the gold held in Indian households as well
as put it to productive use. The larger objective is to cut down the country’s gold
imports by decreasing domestic demand. India, incidentally, is the second-largest
consumer of gold after China.
4. The objective is to simultaneously safeguard the gold held in Indian households as well as
put it to productive use. The larger objective is to cut down the country’s gold imports by
decreasing domestic demand. India, incidentally, is the second-largest consumer of gold
after China.
Some of the major objectives of the Gold Monetization Scheme are:
• Mobilization of the gold that is possessed by the various households in the country.
• To reduce the import of gold to meet domestic demand.
• To support and improve the gold and jeweler sectors by providing gold loans from
banks.
• To provide certificates to the depositors mentioning the amount and purity of the gold
deposited.
5. •The scheme provides short term bank deposits (1-3 yrs), medium deposits (5-7 yrs)
and long term government deposit (12-15 yrs) with no maximum limit of
investment.
•A minimum deposit of 30gm raw gold can be made under this scheme in the form
of gold bar, coin or jeweler.
•The scheme allows premature withdrawal after a minimum lock-in period.
However, it charges a penalty for such withdrawals.
•An interest rate of 2.50% per year is provided by the Gold Monetization Scheme
which is higher than the rates offered by previous gold investments.
•The scheme also offers redemption of the short term deposits in the form of either
gold or rupees at current rates applicable.
6. The Gold Monetization Scheme is a great opportunity for big Indian households to make profits from
the old jewellery lying in bank lockers and at the bottom of safe deposit boxes. Companies, trusts,
jewelleries and individuals who have a hoard of gold can also use this scheme to monetize their
precious metal. But do not forget that your jewellery will not come back to you in the same form as
you put them in – you get the returns in the form of money or gold coins and bars that you can later
encash.
When you bring gold (jewellery) to the bank that has implemented this scheme, it will be first tested
for purity by the concerned authorities. Next, the authorities will ask for the depositor’s consent to
melt their gold deposit. On receiving the consent, the yellow metal will be melted in your presence.
The depositor will receive a certificate by the collection centre stating the amount and purity of the
deposit. This certificate will later have to be presented in the bank to open the Gold Savings
Account. Once the account is active, the metal will be credited into the depositor’s account. The
banks may also ask you to complete the KYC(Know Your Customer) process. The deposited gold will
be lent by banks to jewellers at an interest rate little higher than the interest paid to customer.
7. ▪ Accumulation of money in other form
▪ Gold is not easily lost destroyed
▪ Passed on from a generation to the next
▪ Light in weight
▪ Liquidated in times of need
9. ▪ Any form of gold can be used
▪ Minimum deposit of pure gold should be 30 gms
▪ The interest would be given in gold grams.
▪ Breaking of lock-in period will be allowed.
▪There would be a penalty on premature redemption including part withdrawal.
▪ Minimum tenure is one year.
