Gold Monetization Scheme Case Study

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A study on Gold Monetization Scheme in India towards Government perspective - A tool to curb the market burden Mrs.M.Jyothi Prasad, Asst. Professor, MVSR Engineering College. Mrs.V.Latha, Ed the MVSR Engineering College. ABSTRACT Gold monetization scheme is an initiative towards enhanced financial investments in India. It is the first salvo as part of its plan to curb the market burden. In order to bring down market borrowings and to save interest upon, the government introduced the GMS intending to use deposits under this scheme as loans to be given to the corporate sector and India’s gems and jewellery sector through banks. Since the government estimates about 20000 tones of gold is being held by households and institutions, its…show more content…
• Gold mobilised under this scheme may help the Govt. in reducing the borrowing cost by supplementing RBI gold reserves. Draft Gold Monetization Scheme for mobilisation of gold: I. Purity Testing Centres: BIS hallmark centres work as Purity Testing Centres under this Gold Monetisation Sch: me and they are engaged in certifying the purity of the gold. Once the customer collects the certifying copy from the centre about its purity of the gold, he may deposit the same with the bankers. 2. Deposit of Gold: *After receiving the certificate given by the centre for the purity of the gold, the customer can deposit the same with the bank. Then the banker will open Gold Savings Account to the customer by crediting the quantity of gold into their account. *The minimum gold proposed to deposit with the bankers as 30 grams so that it can be affordable by even small depositors. *Interest payable by banks to the customers after 30/60 days, the rate is left to the bankers to decide. Suppose a customer deposits 100 grams of gold @ 1% interest, on its maturity he has a credit of 101 grams. *Redemption option either in gold or cash is to be given in the beginning of the account
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