RBI Gold Monetization Scheme

Gold has always been an important metal in Indian families—the maximum amount of gold bought in any family is during a wedding. According to a few reports, it has been found that Indian households have over 20,000 tons of gold lying idle. The Reserve Bank of India has an excellent idea to use this idol gold into a productive asset. The government of India launched this scheme called the Gold Monetization Scheme. This scheme's primary purpose is to mobilize the gold and help reduce India's dependency on foreign countries for gold import. GMS compilation of previously existing schemes called the gold deposit scheme and the gold metal loan. So let's understand what the gold monetization scheme is. GMS is a scheme where the user can deposit the gold they have into their GMS account. It would let you earn interest as the prices of the gold rise. It has multiple benefits of depositing gold. 1) Mobilize idle gold: Indian families have made this mistake by keeping the gold idle in their household. But according to the record, the price of gold has always been increasing. So by depositing the gold, it will help stabilize the national market and further help the jewellers and the Indian jewellery sector a lot. It will create an excellent opportunity for gold and help in exporting works, drinking, and much revenue in the country. 2) Earn interest: the gold lying in your house or the locker becomes more of a liability to you. Using it as an asset and earning money from it is the wise move anyone can make. Storing it in the house or the locker creates a sense of anxiety as a constant worry of its safety will trouble you. Thus, by investing in the gold monetization scheme, one will earn money from it and need not worry about its safety. 3) Safely stored: as discussed in the previous point, the storage of gold in one's house or the locker can create a sense of anxiety. And this calls for more investment into the safety devices of the house. To save a great deal of money and keep the gold safe, the scheme is the best place to invest. It is doing to help you deal with the problem. 4) Tax benefits: according to the policy, the amount earned from the gold deposited in the scheme does not fall under any taxation norms. Thus, the money earned is transferred to the recipient's bank account. The interest earned on the gold is also not included in the capital gain taxation policy. The scheme is available at all branches of all the banks. Usually, all the gold collections are done at a dedicated place called the Collection and Purity Testing Center. The depositor will start earning interest from the day the gold is converted into pure gold bars or, more precisely, 30 days after the receipt of gold. There is also an eligibility criterion for being able to deposit gold under the Gold Monetization Scheme. Those are: 1) The Depositor should be a resident of the country. 2) Any Proprietorship and partnership firms 3) Central Government and State Government of any institute owned by them. These also include the charitable trust and the Mutual fund registered under SEBI. The Good Monetisation Scheme has three main types of deposit scheme under it. They are: Short Term Gold Deposit This deposition policy has a tenure of one to three years. It has a minimum gold deposit amount of thirty grams. In this policy, the interest rates are decided by the respective bank. The lock-in period is decided by the banks too. But one interesting thing is that the amount returned is in the form of gold. The gold deposited in this policy is usually given to the jewellers as a loan. Medium Term Gold Deposit This deposition policy has a tenure of five to seven years. It has a similar minimum gold deposit amount of thirty grams. In this policy, the interest rate is 2.25% per annum. The lock-in period is for three years. The interest earned is transferred in terms of currency and not in the form of gold. It is better as the money could be used to invest in other places. Long Term Gold Deposit It is exactly like the second deposition policy. Still, the tenure ranges from twelve years to fifteen years, and the interest rate increases to 2.5% per annum. The lock-in period is five years in this case. Thus, under GMS, the mobilization of gold through the lending of gold to the jewellers helps balance the economy and reduce the dependency on foreign countries for importing gold. Many would-be wondering about the existence of Gold Metal Loan. In this matter, the RBI has stated clearly that the two schemes would be running parallel to each other. Banks offering Gold Monetization Schemes: SBI Gold Loan: Most reputed public sector bank, SBI provides gold loans at a low-interest rate. The loan is especially beneficial for people looking for loans for agricultural purposes. It gives a lower interest rate for agriculture purpose gold loans. ● Interest Rate: 7.50% ● Loan Amount: INR 20000- INR 20 L HDFC Gold Loan: A reputed private sector bank, HDFC provides gold loans starting from 9.90% for up to 2 years. They also offer a lower interest rate for agriculture loans against gold. ● Interest Rate: 9.90% ● Loan Amount: INR 25000- INR 50L ICICI Gold Loan: ICICI offers gold loan at varying interest rates for different purpose. The loan amount is decided by the purity of gold and other essential parameters. ● Interest Rate: 10.00% ● Loan Amount: INR 10000- 15 L PNB Gold Loan: Being the second-largest bank in India, PNB offers gold loan at a modest rate for % ● Interest Rate: up to 12 month ● Loan Amount: INR – INR 10 L Axis Bank Gold Loan: They offer a gold loan for a period of 2 years at zero prepayment charges. ● Interest Rate: 13% ● Loan Amount: INR 25000- INR 20L Benefits: India houses a significant proportion of its gold reserves at homes. It is a valuable commodity that can be liquidated quickly. In situations like a crisis, gold loans can help you meet your everyday needs at a low-interest rate. From this article, we would like the readers to understand the importance of using the house stored serviceable gold as an asset and earn an extra income from it. It is an excellent way of earning more in today's world of inflation and hiked up the prices.

RBI Gold Monetization Scheme