The Gold Monetisation Scheme enables individuals (households) and institutions to deposit their gold holdings with the banks by earning interest. The deposit is treated as a term deposit in the form of gold. So one can deposit his gold lying idle in bank lockers by earning interest at the same time.
The scheme allows the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account.
The scheme allows the depositors of gold to earn interest in their metal accounts and the jewelers to obtain loans in their metal account.
There are 3 gold deposit schemes as
The scheme would allow an investor to deposit gold in Short Term Bank Deposits (SRBD) and Medium and Long Term Government Deposit (MLTGD). The tenure of a Short Term Bank Deposit is 1-3 years. The Medium and Long Term Government Deposits can be opened for 5 -7 years and 12-15 years respectively. There will be a different rate of interests for different tenures.
The Short Term Bank Deposit would be accepted by individual banks on their own account. But the Medium and Long Term Government Deposits would be accepted by banks on behalf of the Government of India based upon notification issued by the Reserve Bank of India.
The scheme would allow an investor to deposit gold in Short Term Bank Deposits (SRBD) and Medium and Long Term Government Deposit (MLTGD). The tenure of a Short Term Bank Deposit is 1-3 years. The Medium and Long Term Government Deposits can be opened for 5 -7 years and 12-15 years respectively. There will be a different rate of interests for different tenures.
The Short Term Bank Deposit would be accepted by individual banks on their own account. But the Medium and Long Term Government Deposits would be accepted by banks on behalf of the Government of India based upon notification issued by the Reserve Bank of India.
How it generally works?
When a customer brings in gold to the counter of specified agency or bank, the purity of gold is determined and the exact quantity of gold is credited in the metal account. The deposited gold will be lent by banks to jewellers at an interest rate little higher than the interest paid to customer, same as money in deposited in accounts and lend.
However at the time of redemption, one will not get the same form of gold deposited because it would be melted.
When a customer brings in gold to the counter of specified agency or bank, the purity of gold is determined and the exact quantity of gold is credited in the metal account. The deposited gold will be lent by banks to jewellers at an interest rate little higher than the interest paid to customer, same as money in deposited in accounts and lend.
However at the time of redemption, one will not get the same form of gold deposited because it would be melted.
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