PM Modi Launches Gold Monetisation, Sovereign Bond Schemes

Prime Minister Narendra Modi on Thursday launched three schemes related to gold. The gold montetisation scheme is aimed to lure tonnes of the precious metal from India households into the banking system. The scheme is aimed at unlocking 20,000 tonnes of the precious metal lying idle in households and temples, estimated at around $800 billion. Under this scheme, banks will collect gold for up to 15 years and pay 2.25-2.50 per cent interest per year.

PM Modi also launched sovereign gold bonds that offer 2.75 per cent interest to investors to cut physical buying of the precious metal. Both these schemes are aimed at cutting reliance on gold imports.

Huge gold imports pushed India's current account deficit to a record $190 billion in 2013, prompting the government to hike its duty on imports to a record 10 per cent. In 2014-15, India imported an estimated $34 billion of gold.

Also, as part of the gold monetisation programme, the prime minister also launched first-ever national gold coin minted in India which will have the national emblem of Ashok Chakra engraved on one side and Mahatma Gandhi on the other side.

Initially the coins will be available in denominations of 5 and 10 grams. (With Agency Inputs)