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The Gold Monetisation Scheme has been introduced by the Government of India. It is a scheme that is designed to monetize gold, which is in the form of bars, coins, or jewellery. Under this scheme, people can deposit their gold with banks and earn interest on it. This scheme was introduced to help reduce the current account deficit and balance of payment problem that India faces.
This article will provide an understanding of how this scheme works and what it means for your business.
Table of Contents
Introduction: What is a Gold Monetisation govt. of India Scheme and How Does it Actually Work?
The Gold Monetisation Scheme is an initiative of the Government of India to mobilize gold in the country. The scheme was launched on September 15, 2015, and has been successful in attracting a large number of people with gold holdings.
How to Make Money With a GMS scheme by Govt. of India?
In order to make money with GMS, you have to buy gold from any of the authorized depositories that are registered with the RBI under the GMS. You can then sell this gold to a bank or an authorized dealer registered with the RBI.
How does GMS works?
The gold is accepted at the Collection and Purity Testing Centres (CPTC). The deposit certificate is issued by the bank.
They have a minimum of 30 grams of gold which is required to avail this scheme but there is no maximum defined under the scheme.
The designated banks for GMS schemes are
(ICICI Bank, Corporation Bank/Union Bank of India, Indian Overseas Bank, Punjab National Bank, State Bank of India, HDFC Bank, Yes Bank, Dena Bank/Bank of Baroda).
The GMS is accepted under Short term, 1-3 years, Medium-term( 5-7 years), and Long term (12 -15 years) accept gold deposits under the Short Term (1-3 years) Bank Deposit (STBD) as well as Medium Term (5-7 years) and Long Term (12-15 years)Deposit Schemes (MLTGD).
Interest
Interest is decided by the banks at the prevailing market rates for short term deposit and is paid the banks.
For medium- and short-term deposits the interest rate is decided by the Government in consultation with RBI and is paid by the central Government.
Redemption of the GMS
For short-term and medium-term deposits, customers will have the option to redeem the principal at maturity in Indian Rupee or an equivalent value in Gold. If you are redeeming the gold Medium-term deposit scheme prematurely then it will be paid only in INR but for Short term deposits, the bank can decide whether to pay in Gold or in INR.
Tax Implications on GMS
Govt. will notify time to time on the tax implications on the GMS. If there is any exemption notified it will be applicable to GMS as well.
Check the more details on the GMS website.
What is the Future of the Gold Economy and Will it Survive?
In the digital economy, we are increasingly using virtual currencies for transactions. With the emergence of blockchain technology, cryptocurrencies have been introduced to the world.
The future of the gold economy is uncertain. It has been a reliable store of value for centuries and will continue to be so in the future. However, it will not be a mainstream form of exchange in the digital economy.
Conclusion:
The Gold Monetization Scheme is an effort by the Government of India to reduce the country’s import dependence on gold, reduce the current account deficit, and help to safeguard the country’s foreign exchange reserves.
The GMS scheme was launched in 2015 with the objective of mobilizing idle gold in the country. Under this scheme, banks, bullion dealers, and jewelers are authorized to collect gold in exchange for interest-based loans.
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