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Modifies Gold Monetization Scheme

The Reserve Bank of India (RBI) has Thursday has eased its Master Direction on Gold Monetization Scheme in consultation with Central Government to make it more customer-friendly. This is a change from the earlier norm where customers had a choice of collecting their interest in cash or gold during the time of redemption.

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Withdrawals are allowed after a minimum lock-in period of three years for medium-term deposits and five years for long-term deposits, although such withdrawals will attract a penalty in the form of a lower interest rate, the bank said.

“This will reduce the time lag between the time the raw gold is deposited and it starts bearing interest”, it said. The gold deposited would be later refined for domestic objective and would help cut dependence on imports.

The government today said it has netted a hefty 900 kgs of idle household and temple gold under the monetisation scheme and is hopeful that the number would rise further in future.

Under the Gold Monetisation Scheme (GMS), 2015, banks will collect gold for up to 15 years to auction them off or lend to jewellers from time to time.

Chennai: The government has made a slew of changes in its gold monetisation scheme to make it more flexible and attractive.

It has been chose to allow designated banks to sell the IGCs manufactured by MMTC, RBI said in a notification.

India imports around 1,000 tonnes of gold every year, draining out foreign exchange and putting pressure on the fiscal deficit.

To increase awareness among depositors, Government had continued the Media campaign in AIR and FM radio. “These will be subject to a reduction in the interest payable”, the statement said.

Indian Banks Association (IBA) will communicate the list of the BIS licensed CPTCs and refiners to the banks.

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The government also clarified that Tax exemptions under the GMS include exemption of interest earned on the gold deposited and exemption from capital gains made through trading or at redemption.

Banks to get 2.5% commission under gold monetisation scheme