India to launch two gold schemes in November

NEW DELHI (Scrap Monster):India’s Ministry of Economic Affairs declared that the government will launch two new gold schemes- gold monetization scheme and sovereign gold bond scheme during the month of November this year.

The government had earlier planned to launch the schemes in early-September but was delayed pending RBI approval. Further to certain changes to the earlier scheme, both the schemes received cabinet nod only last month. According to Shaktikanta Das, Economic Affairs Secretary, the government has already conducted detailed discussions with the country’s central bank and that the details are being worked out. A final launch of both the schemes will be in November, he confirmed. In addition, the Ministry has also entered into an agreement with MMTC to launch gold coins with ‘Ashoka Chakra’ symbol.

The proposed monetization scheme intends to mobilize idled household gold which could help to reduce the country’s gold import bill substantially. Even if the scheme is able to attract 200 tonnes of deposits every year, it could help India to put an end to the over-dependence on gold imports. This in turn could bring in more stability to country’s trade balance.

The scheme will be first launched in select major cities and later expanded to other cities. The scheme will accept deposits of gold in any form. The tenure of the deposit will vary from 1 to 15 years. The deposited gold will be paid interest. In case of redemption, the payment will be based on the prevailing gold market rate at the time of redemption.

Through Sovereign Gold Bond Scheme, investors could obtain gold certificates from the government, which can later be encashed for money or physical gold. The bonds will be issued in denominations of 2, 5, 10, 50 and 100 grams for 5-7 years tenure. The rate of interest would be calculated on the value of gold at the time of investment in the bond.