RBI makes it easier to deposit gold under scheme

In a move to revive the flagging Gold Monetisation Scheme 2015, the Reserve Bank of India (RBI) has made it easier for depositors to hand over their holdings of the precious metal.

In an amendment to the scheme, the RBI said that, while all deposits have to be made at collection & purity testing centres (CTPCs), banks may accept gold at designated branches, especially from the larger depositors. Banks must also identify at least one branch in a state/Union territory where they have a presence to accept the deposits under the scheme.

“Banks may, at their discretion, also allow the depositors to deposit their gold directly with the refiners that have facilities to carry out final assaying and to issue the deposit receipts of the standard gold of 995 fineness,” the RBI said, amending the circular. Until now, potential depositors had to submit gold to a CTPC and then to a collection centre — both named by the government. The downside is that jewellery, if handed over, loses its artistic value as it is melted. In 2015, the government had revamped the old Gold Deposit Scheme and launched the Gold Monetisation Scheme, offering a higher interest rate for those who offered gold as deposits. The scheme was introduced to reduce the country’s reliance on gold imports to meet domestic demand. The move was also aimed at reducing the demand for physical gold.

The scheme was not considered a success as collections were less than 15 tonnes, which was largely from temples. However, this is a small fraction of the 1,000-tonne demand in the country. In response to a parliamentary query in 2016, the government had said that the estimated amount of gold with public and temples was estimated to be 20,000 tonnes.

Under the scheme, gold can be deposited for a short-term bank deposit of 1-3 years. The medium- and long-term government deposits can be opened for 5 -7 years and 12-15 years respectively. #casansaar (Source - RBI, Times of India)