Tagged: Gold Deposit Scheme

NTH :: RBI allows pre-mature withdrawal in gold monetisation scheme

In an effort to make the Gold Monetisation Scheme more customer-friendly, the RBI today said depositors will be able to withdraw medium-term (5-7 year) and long-term government deposits (12-15 years) pre-maturely after the minimum lock-in period, though with a penalty.
By: PTI | Mumbai | January 21, 2016 11:07 PM | Financial Express


In an effort to make the Gold Monetisation Scheme more customer-friendly, the RBI today said depositors will be able to withdraw medium-term (5-7 year) and long-term government deposits (12-15 years) pre-maturely after the minimum lock-in period, though with a penalty.

The Reserve Bank today made a few amendments to its Master Direction on the Scheme.

The modifications, it said, have been made in consultation with the government to make the Scheme “more customer-friendly”.

The rate of interest on the deposits will be decided by government and notified by the RBI from time to time.

The current rate of interest as notified by the government on medium term deposit is 2.25 per cent per annum and on long term deposit is 2.50 per cent per annum.

“The depositors will be able to withdraw medium term and long term government deposits pre-maturely after the minimum lock-in period of three years in the case of medium term deposits and after five years in the case of long term deposits,” it said.

However, there will be penalty in the “form of lower rate of interest for premature withdrawals” depending upon the actual period for which the deposit has run.

Further in the case of large tenders of gold, the RBI said the metal can be deposited directly with refiners wherever they have the assaying capacity.

“This will reduce the time lag between the time the raw gold is deposited and it starts bearing interest,” RBI said.

RBI also clarified that government will pay the participating banks a total commission of 2.5 per cent (1.5 per cent handling charges and 1 per cent commission) in the first year.

The Scheme will be reviewed regularly based on feedback so as to address any implementation issue and to make it more customer friendly.

Last week, Economic Affairs Secretary Shaktikanta Das had said under the Gold Monetisation Scheme more than 500 kg of gold has already mobilised and the Scheme was picking up.

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.

In November last year, Prime Minister Narendra Modi had launched a scheme to channelise gold worth over Rs 52 lakh crore lying with households into the banking system and floated paper bonds to curb its imports that have made India the largest buyer of gold in the world.

India imports a staggering 1,000 tonnes of gold every year, draining out foreign exchange and putting pressure on the fiscal deficit. An estimated 20,000 tonnes of gold worth over Rs 52 lakh crore is lying with households and temples.

The RBI further said the principal and interest on Short Term Bank Deposit (STBD) would be denominated in gold.

In the case of Medium and Long Term Government Deposit (MLTGD), the principal will be denominated in gold.

“However, the interest on MLTGD shall be calculated in Indian Rupees with reference to the value of gold at the time of the deposit,” the RBI said in its amended circular.

Resident Indians (Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the Gold Monetisation Scheme.

Joint deposits of two or more eligible depositors are also allowed under the scheme and the deposit in such case would be credited to the joint deposit account opened in the name of such depositors.

The existing rules regarding joint operation of bank deposit accounts including nominations would apply to these gold deposits.

All deposits under the scheme would be made at the Collection and Purity Testing Centre (CPTC).

“Provided that at their discretion, banks may accept the deposit of gold at the designated branches, especially from the larger depositors.

“….banks may, at their discretion, also allow the depositors to deposit their gold directly with the refiners that have facilities to carry out final assaying and to issue the deposit receipts of the standard gold of 995 fineness to the depositor,” the RBI circular added.

The government will notify the list of BIS certified CPTC / refiners under the Scheme and would be communicated to the banks through Indian Banks’ Association (IBA).

Source: http://goo.gl/gNXEZy

NTH :: Banks free to fix interest rates: RBI

The minimum deposit at any one time shall be raw gold — bars, coins, jewellery excluding stones and other metals — equivalent to 30 grams of gold of 995 fineness.
By: ENS Economic Bureau | Mumbai | Published:October 23, 2015 12:58 am | Indian Express


The Reserve Bank of India (RBI) on Thursday issued directions to all scheduled commercial banks on the implementation of the Gold Monetisation Scheme which will replace the Gold Deposit Scheme of 1999.

According to the guidelines banks will be allowed to fix their own interest rates on gold deposits.

The deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them, according to a press release issued by the RBI. The central bank said that resident Indians that include individuals, HUFs (Hindu Undivided Families), trusts including mutual funds/exchange traded funds registered under Sebi (mutual fund) regulations and companies can make deposits under the scheme.

The minimum deposit at any one time shall be raw gold — bars, coins, jewellery excluding stones and other metals — equivalent to 30 grams of gold of 995 fineness.

“There is no maximum limit for deposit under the scheme. The gold will be accepted at the Collection and Purity Testing Centres (CPTC) certified by Bureau of Indian Standards (BIS) and notified by the Central government under the scheme. The deposit certificates will be issued by banks in equivalence of 995 fineness of gold,” it said.

The RBI notification in this regard comes ahead of the formal launch of the scheme by Prime Minister Narendra Modi on November 5. The gold deposit scheme is aimed at mobilising a part of an estimated 20,000 tonnes of idle precious metal with households and institutions.

As per the guidelines, banks will be free to set interest rate on such deposit, and principal and interest of the deposit will be denominated in gold. “Redemption of principal and interest at maturity will, at the option of the depositor be either in Indian rupee equivalent of the deposited gold and accrued interest based on the price of gold prevailing at the time of redemption, or in gold. The option in this regard shall be made in writing by the depositor at the time of making the deposit and shall be irrevocable,” it said.

The interest will be credited in the deposit accounts on the respective due dates and will be withdrawable periodically or at maturity as per the terms of the deposit, it said. “The designated banks will accept gold deposits under the Short Term (1-3 years) Bank Deposit (STBD) as well as Medium (5-7 years) and Long (12-15 years) Term Government Deposit Schemes. While the former will be accepted by banks on their own account, the latter will be on behalf of Government of India,” it said.

The short term bank deposits will attract applicable cash reserve ratio (CRR) and statutory liquidity ratio (SLR), it said.

Source : http://goo.gl/kT3v54

ATM :: SBI Gold Deposit Scheme: Get Regular Income From Your Gold

September 18, 2015 by Chandrakant Mishra | PlanMoneyTax.com


SBI Gold deposit Scheme is there to give you recurring income while original gold will remain intact. Of course from this income you can buy more gold as well. In either words when you put your gold in this scheme it starts to grow. The SBI gold deposit scheme is superseded by the Gold Monetization scheme. This scheme is more flexible and gives better interest.

SBI Gold Deposit scheme accepts all types of gold whether it is jewelry or bullion. The scheme will give interest on the pure gold irrespective of the form

Should I Deposit The Jewelry?

You can deposit the gold jewelry in Gold deposit scheme, But you should beaware that the gold deposited to this scheme is subjected to the melting. Hence, it is not advisable to deposit those jewelry which are used. Instead, you should deposit the idle gold. You can deposit those jewelry which are old fashioned and kept as an asset.

Why Should I Deposit in SBI Gold Deposit Scheme?

Depositing your idle jewelry in SBI Gold Deposit Scheme will give you many benefits.

  • Peace of mind. You need not to be concerned about its safety. Not threat of burglary or stealing.
  • You will get the interest for nothing.
  • Your gold will get tested and you will get pure gold after that. No melting assaying charge.
  • You will save the locker charge.
  • You will serve the nation by reducing the import bill.

Tax Benefits of SBI Gold Deposit Scheme

  • No income tax on the interest from this scheme
  • No capital gain tax if you take back cash instead of the gold after the maturity.
  • You will not be charged wealth tax for the deposited gold.

Will Your Gold Stay Safe?

Your gold deposit will be as safe as your money in the bank. Actually banks do not put all the gold in its safe instead major chunk of the gold is given to jewelers as loan or it remains in RBI mint. Bank gets interest over it and pays the majority of this to the depositor.

What interest rate will I earn?

Interest rate is not very lucrative in SBI Gold Deposit Scheme. It is from 0.75% to 1%. Don’t frown; you get nothing when you keep your gold in home. As well this interest is in gold currency. This simply means that if you deposit 1 Kg Gold the bank will give price of 10 gram gold (1% of 1 Kg) after one year. Assume gold price doubles in one year then effectively you are getting 2% interest rate.

Also don’t forget to add your expense of locker.

Why Interest Rate is so low?

  • Gold do not produce anything itself such as farm land.
  • People don’t take gold jewelry on rent such as property.
  • You will get your whole gold with all the appreciated value.

What are the restrictions?

Now government has eased the restrictions from SBI Gold Deposit Scheme. The most important is the reduction of minimum tenure. Now you can deposit your gold for 6 months as well. Earlier the minimum tenure was 3 years.

You have to deposit more than 500 gram of the gold for this scheme. This is a major deterrent. Hopefully government will give some relaxation in weight also. The Gold Monetization Scheme has the minimum limit of 30 gram only.

What will I do if I need fund for exigency?

You can take loan from any branch of the SBI by mortgaging your gold deposit certificate. It same as you take loan by depositing your FD certificate. Loan can be taken up to the 75% of the gold value. Interest rate will be lower than the personal loan.

Where should I Deposit My Gold ?

Not all banks provide Gold Deposit Scheme. Till now only SBI this scheme and at the designated branches only. But now RBI has given permission to the banks to start Gold Deposit scheme on its own. Banks do not need prior permission. So in future You can expect that more banks will start this scheme.

What is the procedure of SBI Gold Deposit Scheme?

Go to your nearest branch with your ornaments or gold bar biscuits etc. Bank will take the gold and give you the provisional certificate. Bank will send the gold to the reserve bank gold mint. Purity of the gold will be determined there and it is melted. According to the purity the weight of the gold will be fixed. After that Bank will give you the Final certificate. You can demand standard certificates of 500 gm, 1000 gm or 2000 gm also. Either you can opt for statement or passbook also. Note often it may happen that actual weight of the gold becomes less because of impurity. Don’t fret, you must rely on RBI.

How Will I Get Back My Gold?

After Completion of the tenure you can claim your gold with the interest. For the Interest you have the option of cumulative and non cumulative.

Either you can take the cash instead of the gold. No capital gain tax will be charged in this amount.

How can I check that Gold returned is pure?

Gold returned will 0.999 finesse pure, certified by RBI Mint. It is the purest form of the gold. It will be in bar form.

How Gold Deposit Scheme Works

Banks give your gold to the jewelers on loan. Bank earns interest on it. Major part of the interest is given to the customer.

Source : http://goo.gl/SwS7e9