On 21 January ,2016 Reserve bank of India (RBI) has done major changes in Gold Monetisation scheme (GMS) is order to make the GMS more customer friendly. Moving in this direction Reserve bank of India (RBI) has issued modification in the Master circular of GMS scheme. In this scheme the investor has to deposit the Gold and against the deposit the investor will earn the interest. The interest earned on this scheme is from 2.25 to 2.50 percent annually. This scheme is divided into two segments: one is medium term deposit and other is long term deposit.
10 Modification by Government in Gold Monetisation scheme:
- Premature Withdrawal: With the new change in the scheme now the investor of medium term deposit whose term of deposit is 5 to 7 years can do premature withdrawal after the third year of the scheme. In case of long term deposit whose term of deposit is 12 to 15 years can do premature withdrawal after the 5th year of the deposit. If the premature withdrawal is done in that case the interest rate will also reduce, it will depend upon the duration of deposit.
- Fees to pay: A fees to be paid to the banks which are providing the services like purity test charges, refining, transportations and storage charges. For this a commission of 2.5% will be paid to the banks. From 2.5% commission paid to the bank 1.5% will be paid for Gold handling and 1% as commission for the scheme.
- Direct Deposit: Previously in this scheme if any investor has to deposit the gold, then the investor has to deposit the gold at Collection and Purity Test Centres (CPTCs).But with the new change in the scheme the investor can do direct deposit at the refiners. This will provide major benefits to the bulk depositors which includes institutions deposits in this scheme.
- Flexibility for refiners: In this scheme previously minimum three years of experience was required for the refiners to participate in the scheme. This standard was set by Bureau of Indian Standards (BIS). But with the new change in scheme, the minimum experience for the refiners to participate in this scheme is reduced from three years to one year. By this change more refiners can participate in this scheme.
- Quantity of Gold: With the new change in the scheme now an investor can deposit gold expressed upto three decimal of the gram. By doing this the investor will get more benefits by investing in this scheme.
- Any Purity: With the new change in scheme the gold deposit at CPTCs and refiners would of any purity. Depending upon the purity the customers would get the deposit certificate from the CPTCs and refiners.
- Invitation for jewelers: Bureau of Indian Standards (BIS) has published Expression of Interest (EOI) on their site. By doing this 13,000 licensed from different jewelers which can act as CPTC in the scheme are invited from all over India.
- Free to Hedge: With the new change in scheme, now the banks are free to hedge their positions in case of short-term deposits.
- Issue solved: Previous there were some unsolved issues in the scheme like how to calculate the interest on the scheme, how to take loan against the GMS deposit. With the new change in scheme all these issues are solved now.
- Contact Point: Now the government has issued the contact point for the GMS scheme like the website which is finmin.nic.in/swarnabharat and toll free number. The toll free number is 18001800000.