The Reserve Bank of India (RBI) has issued norms for implementation of the gold monetisation scheme. Banks are now putting in place the requisite processes and the exact date of implementation of the scheme will be announced soon, the RBI said. Prime Minister Narendra Modi has said the government will launch gold monetisation scheme next month.
Here are 10 things to know:
1) Under the gold monetisation scheme, customers can deposit their gold and earn interest on it.
2) The minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of the precious metal of 995 fineness, the RBI said. There is no maximum limit for deposit under the scheme.
3) All scheduled commercial banks have been allowed to offer this scheme. The designated banks are free to fix the interest rates on these deposits, the RBI said.
4) The principal on maturity and interest will be linked to the prevailing price of gold at that time. The depositor will have the option to either take it in gold or equivalent rupee terms. At the time of opening the gold deposit account, the investor has to specify the option and once chosen it cannot be changed.
5) Under this scheme, banks will be allowed to accept three kinds of deposits: short-term (maturity between 1 to 3 years), medium-term (5 to 7 years) and long term (12-15 years.)
6) All gold deposits under the scheme shall be checked at collection and purity testing centres which will be notified by the government.
7) There will be provision for premature withdrawal subject to a minimum lock-in period and the penalty will be determined by individual banks.
8) Joint deposits of two or more depositors will be allowed under the scheme. The existing rules regarding joint operation of bank deposit accounts including nominations will be applicable to these gold deposits.
9) Resident Indians and mutual funds/exchange traded funds registered under market regulator Sebi can make deposits under the scheme.
10) The objective of the scheme is to mobilize a part of an estimated 20,000 tonnes of gold held by households and institutions in the country and to reduce India's reliance on the import of gold. The Cabinet has approved the scheme.