The scheme, which offers interest on idle gold, was launched on November 5, 2015 with the objective of mobilising gold held by households and institutions in the country | Lucky Palace Download
The Gold Monetisation Scheme (GMS) launched by Prime Minister Narendra Modi in 2015 may soon be relaunched by the government to make it more attractive. The new mechanism has been finalised and the Finance Ministry is likely to announce the same over the next few days, a Business Standard report states.
The Finance Ministry will select 40-50 cities where banks will promote the scheme. It will further identify one branch in each city to accept gold deposits, which will be based on the certificate provided by the collection centre, the report suggests.
The scheme, which offers interest on idle gold, was launched on November 5, 2015 with the objective of mobilising gold held by households and institutions in the country. The scheme allows bank customers to deposit their idle gold holdings for a fixed period, in return for interest in the range of 2.25 percent to 2.5 percent.
In three years, the scheme has found few takers with mobilisation of only 14.4 tonne of gold.
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In an effort to revamp the scheme, the Finance Ministry held meetings with stakeholders in the second half of October. On October 31, it held a meeting with banks, representatives of refineries and hallmarking centres and the Comptroller and Auditor General of India to finalise the mechanism, the report states.
At the meeting, the ministry told banks to expedite collection of gold as deposits under the scheme, the report suggests.
Earlier in June, the Reserve Bank of India (RBI) had tweaked GMS to enable investors to open a hassle-free gold deposit account.As part of the revamp, the regulator notified that short term deposits will be treated as a bank's on-balance sheet liability. It added that the interest rate payable in the case of deposits for maturities with broken periods should be calculated as the sum of interest for the completed year plus interest for the number of remaining days.