Gold Monetisation Scheme helps Bring Down Gold Imports
Gold Monetisation Scheme, which modifies the existing 'Gold Deposit Scheme' (GDS) and 'Gold Metal Loan Scheme (GML), is intended to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country's reliance on the import of gold.
The new scheme allows the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. The gold monetisation scheme is actually helping the country bring down gold import and it can be said to be a success.
Under the Gold Monetisation Scheme, 1,512 kg gold deposited by temples & trusts. We are seeing reduction in gold imports #TransformingIndia
— Jayant Sinha (@jayantsinha) April 29, 2016
Benefits of gold monetisation account:
There are many positives to depositing under the Gold Monetisation scheme:
- The gold monetisation scheme earns interest for your gold jewellery lying in your locker. Broken jewellery or jewellery that you don't want to wear can earn interest for you in gold.
- Coins and bars can earn interest apart from the appreciation of value
- Your gold will be securely maintained by the bank.
- Redemption is possible in physical gold or rupees hence giving your gold purchase further earning opportunity.
- Earnings are exempt from capital gains tax, wealth tax and income tax. There will be no capital gains tax on the appreciation in the value of gold deposited, or on the interest you make from it.
What do banks do with the gold:
The designated banks may sell or lend the gold accepted under the short-term bank deposit to MMTC for minting India Gold Coins and to jewellers, or sell it to other designated banks participating in the scheme.
Why should one opt for gold monetisation scheme:
Gold lying in the locker appreciates in value if gold price goes up but it doesn't pay one regular interest or dividend. On the contrary, one incurs carrying costs on it (bank locker charges).
The monetisation scheme allows one to earn some regular interest on gold and save one's carrying costs as well. It is a gold savings account which will earn interest for the gold that one deposits in it.
One's
gold
can
be
deposited
in
any
physical
form
-
jewellery,
coins
or
bars.
This
gold
will
then
earn
interest
based
on
gold
weight
and
also
the
appreciation
of
the
metal
value.
One
gets
back
one's
gold
in
the
equivalent
of
995
fineness
gold
or
Indian
rupees
as
one
desires.
The
option
for
the
same
has
to
be
exercised
at
the
time
of
deposit.