RBI simplifies gold monetisation scheme for bulk depositors

The Reserve Bank of India (RBI) has simplified the gold monetisation scheme (GMS) for bulk depositors, including temple boards, by allowing banks to sell Ashok Chakra-embossed gold coins minted by government-owned MMTC under the 'India Gold Coin' scheme.

MMTC was hitherto selling such coins, introduced last November, only from its 25 centres in the country. The terms and conditions shall be as per the contract between the designated bank and MMTC.

RBI said the current restriction on selling of imported gold coin by the banks will continue.
 
In a circular issued on Thursday, the central bank said: ''Banks may accept the deposit of gold at designated branches, especially from larger depositors. Banks can also allow the depositors to deposit their gold directly with the refiners'' with whom the bank had already signed an agreement for the scheme. Such a refinery ''can issue the deposit receipts to the depositor''.

This was a major demand of temple trusts, many having tonnes of gold and willing to deposit part of that under the GMS. Now these depositors need not move gold to a collection centre, which could be far away from their storage. Banks may open a branch in an area nearby or the refinery can offer this facility directly to the trust.

In fact, the government had launched GMS with an eye on major temple trusts such as the Tirupati Devasthanam or the Siddhi Vinayak in Mumbai.

In another important clarification, which brings GMS in sync with the gold bond scheme, the interest rate for medium and long-term gold deposits will be calculated in rupees and the value will be the prevailing one at the time of making a deposit.

RBI said the principal and interest on a short-term deposit shall be denominated in gold. In the case of medium-term and long-term deposits, the principal will be denominated in gold but the interest calculated in rupees, with reference to the value of gold at the time of the deposit.

The tax implications on GMS will be notified by the government from time to time, RBI said, adding the quantity of gold will be expressed up to three decimals of a gramme.