RBI vide its Master Direction No.DBR.IBD.No.45/23.67.003/2015-16 dated 22nd Oct’2015 (Updated as on 04.08.2022) has issued guidelines on Gold Monetization Scheme. The GMS is intended to mobilize gold held by households & institutions of the country and to facilitate its use for productive purposes and in the long run, to reduce country’s reliance on the import of gold. The customers can deposit their idle gold under GMS which will provide them safety, interest earnings and a lot more.
Main Features of the Scheme:
| Gold Monetization Scheme | |
|---|---|
| Purpose | To mobilize the idle gold in the country and put it into productive use.To provide the customers an opportunity to earn interest income on their idle gold holdings. |
| Persons Eligible to make a deposit | Resident Indians of the following categories: IndividualsHUFsProprietorship & Partnership firmsTrusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) RegulationsCompaniesCharitable institutionsCentral GovernmentState Government or any other entity owned by Central Government or State Government. Joint deposits of two or more eligible depositors are also allowed under the scheme and the deposit in such case shall be credited to the joint deposit account opened in the name of such depositors. |
| Deposit Quantity | Minimum: 10 Grams Maximum: No Limit |
| Types of deposit | Type of SchemeTenor (in Year)Short Term Bank Deposit (STBD)1-3Medium Term Government Deposit (MTGD)5-7Long Term Government Deposit (LTGD)12-15 The deposit under Medium Term And Long Term will be accepted by the Bank on behalf of the Central Government. (Deposites can be accepted for broken period also) |
| Rate of Interest & Payment | (i) Short Term Bank Deposit(STBD): PeriodRate of Interest PA1 year0.50%Above 1 year up to 2 years0.60%Above 2 years up to 3 years0.75% STBD: Non-Cumulative (on 31st March) every year or Cumulative (On Maturity) interest on maturity. The principal on STBD shall be denominated in gold and interest shall be calculated in Indian Rupees with reference to the INR value of gold at the time of deposit w.e.f 05.04.2021. On maturity Interest for broken period will also be paid. (ii) Medium Term Government Deposit: 2.25% P.A. (iii) Long Term Government Deposit: 2.50% P.A. In the case of MTGD & LTGD, the principal will be denominated in gold. However, the interest shall be paid in Rupees annually on 31st March or cumulative interest on maturity. Broken period interest is paid at the time of maturity. Interest is calculated on gold value in rupees, at the time of deposit. Depositor will have option to receive payment of simple interest annually or cumulative interest (compounding annually) on maturity. The option to be exercised at the time of deposit. |
| Acceptance of gold | Gold is accepted in the form of raw gold i.e. Gold bars, Coins, Jewellery excluding stones and other metals. Customers to submit Application Form, Identification Proof, Address Proof and Inventory Form. |
| Nomination facility | Nomination facility will be available on the lines of other Rupee Deposit Schemes. |
| Repayment | STBD: • Deposits prior to 05.04.2021:- Redemption of principal and interest at maturity will be, at the option of the depositor, either in Gold or in INR equivalent of the deposited gold and accrued interest based on the price of gold prevailing at the time of redemption. • Deposits w.e.f. 05.04.2021:- Redemption of the principal at maturity shall, at the option of the depositor, either in INR equivalent of the value of deposit gold at the time of redemption, or in Gold. Interest will be paid in Rupees calculated on the INR value of gold at the time of deposit. MTGD & LTGD: Redemption of the principal at maturity shall, at the option of the depositor, either in INR equivalent of the value of deposit gold at the time of redemption, or in Gold. However, any pre-mature redemption of MLTGD shall be only in INR. Where the redemption of the deposit is in gold, an administrative charge at a rate of 0.5% of the notional redemption amount in terms of INR shall be collected from depositor. |
| Premature payment | STBD: Premature withdrawal may be permitted. However, in case of premature withdrawal before completion of ONE year from effective date of deposit, no interest shall be paid. In all other cases, prepayment penalty of 0.15% shall be levied. Further, any premature redemption shall be in INR equivalent or gold at the discretion of the bank. MTGD: Allowed to be withdraw any time after 3 years with penalty on interest. LTGD: Allowed to be withdraw any time after 5 years with penalty on interest. Interest penalty for MTGD & LTGD will be as per RBI Notification dated 9th Jan ‘2019. |