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Home » Latest News » Now, deposit your gold in bank & earn interest

Now, deposit your gold in bank & earn interest

gold_jewellerySanjeev Sharma:

New Delhi: In an attempt to reduce the demand for physical gold (around 300 tonne every year) and put surplus yellow metal (around 22,000 tonne) in Indian households to economic use, the Cabinet today cleared the Sovereign Gold Bond and the Gold Monetisation Scheme. India, along with China, is among top consumers of gold in the world.

A study by the World Gold Council (WGC) said with India at the centre of the global gold eco-system, it is imperative to find ways of mobilising and monetising the 22,000 tonne gold in Indian households to fund economic growth. The Gold Monetisation Scheme is aimed at mobilising this surplus gold lying idle that can be deposited with banks to earn interest.

The scheme will help reduce the demand for physical gold by shifting a part of the estimated 300 tonne physical bars and coins purchased every year for investment into gold bonds. Since most of the demand for gold in India is met through imports, the scheme will ultimately help in maintaining the country’s current account deficit within sustainable limits.

“It is safer and economically more stable to go under both these schemes,” Finance Minister Arun Jaitley said after the Cabinet meeting.

The gold bond scheme will have an annual cap of 500 gm per person and such bonds would be issued for a period of 5-7 years. Under this scheme instead of buying physical gold, Indian residents can buy gold bonds.

The gold bonds will be issued in 2, 5 and 10 gm denominations (besides other denominations) and the bond terms could be for a minimum 5-7 years so that it protects investors from medium-term volatility in gold prices.

As regards the gold monetisation scheme, Jaitley said people holding idle gold could deposit it in banks for short, medium or long terms. “This is not a black money immunity scheme and normal taxation laws would be applicable,” he said.

Around 1,000 tonne gold was imported annually and people held that quantum of idle gold just for investment purposes every year.

By taking advantage of the gold monetisation scheme, people could deposit their idle gold with authorised agencies and take advantage of price escalation of gold as well as earn interest on the deposit, he said.

Economic Affairs Secretary Shaktikanta Das later said the government planned to exempt capital gain made at the time of redemption under the gold bond scheme.

“These schemes will be launched very soon,” he said, adding that they were different from earlier schemes in the sense that deposits would be denominated in gold, instead of money.

 

(Courtesy: TNS)