Gold monetisation scheme fails to click, bonds attract Rs150-crore investment
20 November 2015
The government's much-hyped Gold Monetisation Scheme failed to take off as the scheme has attracted only 400 grams of gold since its launch a fortnight ago, prompting authorities to simplify the scheme and make it more attractive.
The response to gold bonds and coins, in contrast, has been much better. Reports quoting banking sources said the gold bonds scheme has already mopped up Rs145 crore as of Thursday and is expected to gross up to Rs150 crore when it ends on Friday.
Retail investors had also bought 6,000 gold coins so far.
The Reserve Bank of India has set the price of gold at Rs2,684 per gm for the bonds till the issue closes on 20 November, whereas the ruling market price of bullion is five to six per cent lower depending on the city.
The Rs 150-crore subscription for the bonds is, therefore, seen as a good response. A banker said three to four tranches of bonds could be expected in the next four months.
With the tepid response to gold monetisation scheme, the finance ministry and the Bureau of Indian Standards (BIS) is simplifying the administration of the scheme to get it moving.
A shortage of centres to assay the gold being put on deposit has also been cited as a problem, which the government now plans to address.
Reports say that only one authorised public sector bank had tripartite agreement with hallmarking centres and gold refiners and that no other bank had such arrangements to facilitate the scheme.
The gold monetisation scheme, bonds and coins were launched on 5 November by Prime Minister Narendra Modi, to reduce bullion imports and mobilise 22,000 tonnes of idle gold in the country.
The finance ministry and BIS have now allowed refiners with only one year's track record to sign up for the scheme.
The BIS has certified five refiners so far, but by December, once the norms are relaxed, 20 refiners are expected to be certified.
There were 18 gold refiners in the country in 2014 and their numbers have climbed to 32 now.
There are 35 certified hallmarking centres and it has now been decided that 100 would be approved by the end of December 2015. Any business entity that satisfies BIS criteria can act as a hallmarking centre for the gold monetisation scheme.
It has also been decided that 11 banks would sign agreements with all certified 35 hallmarking centres.
Also, the finance ministry has clarified that the gold deposits would be made transferable and that banks will be allowed to lend against gold deposits. The ministry also clarified that banks could ask customers about the ownership of the gold being deposited.
Banks have also been allowed to deal directly with refiners because of problems associated with routing bulk gold deposits.
The finance ministry said refiners could open hallmarking centres in their premises. Refiners can also open testing centres in cities where temples agree to deposit their bulk gold.
Sources said the government would also address tax concerns surrounding the gold monetisation scheme.