News About Gold Monetization Scheme

• Gold monetisation scheme modified to benefit investors

  The much hyped Gold Monetisation Scheme launched by the government last year has undergone another modification, with the Finance Ministry tweaking the maturity options. Investors can choose to redeem their principal either in gold or its equivalent value in Indian rupees on maturity. This combined with the interest could bring in more investors, something the government aims to achieve, primarily targeting temples who have tonnes of gold reserves.

  

  2nd April 2016

• Gold Monetisation Scheme gets deposits worth Rs 3,000 crore

  The much talked about Gold Monetisation Scheme implemented by the Union Government has garnered deposits to the tune of Rs 3,014 crore, with over 1,100 kg of gold collected so far. After a slow start, the scheme picked up speed after modifications were made to it, with depositors earning an interest of 2.5% per annum on their gold. The government permitted 46 centres to function as Collection and Purity Testing centres, each one designed to accept deposits. Successful implementation of this scheme could reduce imports of gold in the country, utilising available resources.

  

  26th February 2016

• Indian Government does away with tax on Gold Deposits

  In a bid to make use of all the gold and gold jewelry items that lie idle in numerous Indian households, the Indian government has decided to offer tax benefits to customers who deposit their gold items under the Gold Monetization Scheme. This was a recent scheme launched by the Central government to make use of gold that is lying idle in various households and temples.

  Under the Gold Monetization Scheme, gold jewelry, bars or coins can be deposited with banks in turn for interest that can be redeemed as cash or as gold. In case customers wish to withdraw their deposits as money, there will be no capital gain tax charged on the same. The Indian government has come out with this scheme since it strongly believes that greater utilization of gold will reduce gold imports.

  

  25th January 2016.

• Changes made in Gold Monetization Scheme.

  The Reserve Bank of India has made some important changes in the Gold Monetization Scheme for deposits made in bulk. These changes are made to attract gold lying idle in the temples. Now, depositors can deposit golds directly with the refiners with whom participating banks have signed agreements for the scheme. Also, a bank can accept deposits a select branches. Now, depositors need not move gold to a collection centres far away from their storage.

  As notified by the government, now the existing rate of interest on a medium term deposit is 2.25% and on term deposit 2.50% annually. Now, depositor would be able to withdraw long term and medium term deposits after a minimum lock-in period.

  Besides, the central bank has also permitted banks to sell India gold coins manufactured by MMTC under the 'India gold coin' scheme. The principal and interest on short-term deposit will be denominated in gold while for medium and long-term deposits, interest will be calculated in rupees and the principal will be denominated in gold.

  

  22nd January 2016.

• Gold Bonds pricing to be revised

  The ambitious Sovereign Gold Bond plan is bound to see some changes, with the RBI thinking to tweak the pricing to spur demand. The scheme has so far collected Rs 246 crore through 63,000 applications, accounting for 917 kg of gold. Present prices for these bonds are decided after keeping a lag of one week, which in certain cases have made the cost of gold bonds higher than the market price. The government hopes that this new pricing will help it sell bonds worth Rs 15,000 crore by next year.

  

  23rd December 2015

• Changes in the newly launched gold monetization scheme

  The government of India recently decided to make some changes in the recently launched Gold Monetization Scheme, following the weak response faced by this scheme in the first month of its launch. The scheme was launched on 5th November, 2015 along with two other gold schemes. The main intention behind the launch of this was to mobilize gold lying idle in households and utilize the power of gold for the country's economic growth.

  The Gold Monetization Scheme was launched to attract nearly 20,000 tonnes of gold saved in Indian households and temples into the banking system. However, in the first two weeks, the scheme could only attract only 400 grams of gold which is rather a poor response to this scheme.

  Henceforth, the government of India announces several steps to make the scheme more attractive for consumers. It decides to include steps such as removal of capital gains and income taxes on the interest earned. Since support from the bank can be crucial for making this scheme a success, the government of India may even decide to provide incentives to banks.

  

  3rd November 2015