Gold monetization scheme was launched in 2015 by Prime Minister Mr. Narendra Modi and implemented by the Government of India to turn over 20,000 tonnes of gold locked in safes in Indian households into a productive asset. Gold Monetization Scheme was launched with the aim of mobilizing gold for reducing the country’s dependability for importing gold from foreign countries. The scheme also aimed at benefiting jewelers through loans and lending it banks to keep up with the flow.

India imports nearly 800–100 tones gold annually. Although the gold stocks of our country are estimated to be over 20,000 tones, most of the gold is not traded or monetized.

Objectives of the scheme

Initially, announced in the Union Budget Speech of 2015–2016, Gold Monetization Scheme has the following objectives:

What are the salient features of the Gold Monetization Scheme?

Under this scheme, gold in any available form, bullion, or jewelry without any embedded stones can be deposited. Minimum 30 grams of 995 fineness of gold should be deposited; there is no upper limit.

The tenure for gold deposit is categorized into three types, namely short term (1–3 years), medium-term (5–7 years), and long term (12–15 years). In case of premature withdrawal, the penalty is charged to investors.

The rate of interest is 2.25% for the short-term plans on the current price of gold, whereas it is 2.5% for medium- and long-term plans.

What are the benefits associated?

How to apply for the scheme?

Applicants should open an account with a scheduled bank as listed under the guidelines of RBI.

After document verification, applicants/depositors approach the government authorized Collection and Purity Testing Centers (CPTC).

Once CPTC has conducted a thorough assessment of gold, a receipt is issued for gold quantity.

Depositors then submit the receipt to their banks for obtaining the final deposit certificate.

Once gold/jewels are deposited, they are converted into equivalent coins and used by the bank. Upon withdrawal, depositors get an equivalent amount of gold coins or money.

How is the authenticity of gold verified?

Over 331 Assaying and Hallmarking Centers are established throughout various parts and cities of India. These centers usually meet the criteria specified by the Bureau of Indian Standards. These Assaying and Hallmarking Centers have been allocated a task of collecting and assessing the purity of the collected gold.

What are the additional benefits?

  1. Easy and convenient ways of storing gold: Usually, Indians prefer to depositing their gold and other jewelry in storage lockers provided by various banks. Such stored gold is taken out during events, such as weddings and family gatherings, or also to sell it off at some point. However, banks usually charge a particular amount every year for these storage lockers. Ultimately, one ends up spending more on just the safe storage of their gold. Gold Monetization Scheme proffers safety and security to customers’ gold by storing it and returning it in the form of finances or physical gold when the scheme plan of an applicant reaches maturity.
  2. Utility of gold: Maintaining your gold unutilized or storing it into safe deposit lockers of banks or personal houses implies that the gold is lying idle without generating any benefit in return. However, Gold Monetization Scheme helps applicants in avail interest money; one can also opt for en-cashing the gold at the maturity of the scheme plan.
  3. Flexibility in terms of the deposition of gold: Under Gold Monetization Scheme, one can deposit gold in a variety of forms, such as gold bars, gold coins, or gold jewelry. Of note, gold jewelry decorated with gemstones or another form of jewelry cannot be deposited under this scheme.
  4. Flexibility in terms of the quantity of deposit: To ensure that maximum people avail of this scheme, the minimum limit of depositing gold has been set to 30 grams of any purity. Moreover, there is no limit on the maximum quantity.

Indian Gold Coin

An Indian Gold Coin has been launched as a part of the Indian gold Monetization Scheme. This coin is the first-ever national gold coin engraved with a symbol of Ashok Chakra on one side and the face of the father of the nation, i.e., Mahatma Gandhi, on the other side. The coin is available in two forms, namely, 5 and 10 grams of weight; a 20-gram bar or bullion has also been launched under this scheme.

Features of the Indian Gold Coin

The coin is as pure as 24 karat, with a fineness of 999. The coin is hallmarked as per the standards of the Bureau of Indian Standards. The coin is known to be safe and recyclable owing to its tamper-proof packaging and advanced features. The coins are distributed through Metals and Mineral Trading Corporation of India and its various outlets.

For more information click here.