RBI eases norms of Gold Monetization scheme
Q. Which of the following are the new provisions as per the changes made by RBI in the Gold monetization scheme?
1) Gold cannot be given to the refineries. It needs to go through the bank.
2) The banks would be getting a 2.5 % commission for the scheme.
3) Principal and interest on a short term deposit shall be denominated in cash or gold.
4) Existing three years refining experience needed for issuing license to refiners reduced to one year by BIS.- Published on 02 Feb 16a. 1, 2, 3
b. 1, 3
c. 2, 4
d. All of the above
ANSWER: 2, 4
The changes made in the scheme are given below –- Gold depositors can also give their gold directly to the refiner rather than only through the Collection and Purity Testing Centres (CPTCs). This will encourage the bulk depositors including Institutions to participate in the scheme.
- Gold to be deposited with the CPTCs/Refineries can be of any purity. The CPTC/Refiner will test the gold and determine its purity which will be basis on which the deposit certificate will be issued.
- Issues like the method of interest calculation and mechanism for taking loans against GMS deposits have also been clarified.
- Important clarification which brings GMS in sync with the gold bond scheme is that the interest rate for medium and long term gold deposits will be calculated in rupees and the value will be the prevailing one at the time of making a deposit.
- Bureau of Indian Standards (BIS) has modified the licensing condition for refiners already having National Accreditation Board for Testing and Calibration Laboratories (NABL) accreditation from the existing three years refining experience to one year refining experience. This is likely to increase the number of licensed refiners.
- Under the amended norms, principal and interest on a short term deposit (1-3 years) shall be denominated in gold. This is a change from the earlier norm where customers had a choice of collecting their interest in cash or gold during the time of redemption.
- In the case of medium term and long term deposits, the principal will be denominated in gold but the interest calculated in rupees, with reference to the value of gold at the time of the deposit.
- The lock-in period for medium term deposits will be three years; For long term ones, five years.
- The banks would be getting a 2.5 % commission for the scheme which will include the charges payable to the Collection and Purity Testing Centers/Refiners (1.5% handling charges and 1% commission).
