RBI makes changes in gold scheme:UPSC IAS Exam
The Reserve Bank of India made some changes in the Gold Monetisation Scheme by including charitable institutions and the central government, among others.
Gold monetisation scheme:
- It is a scheme that facilitates the depositors of gold to earn interest on their metal accounts. Once the gold is deposited in metal account, it will start earning interest on the same.
- This is akin to a normal banking operation (like a savings bank account), but carried out in terms of gold instead of in rupee.
For example if a customer deposits 100 gm of gold and gets one per cent interest, then, on maturity he has a credit of 101 gram.The interest rate is decided by the banks concerned.
- The tenure of gold deposits is likely to be for a minimum of one year.
- Customer will have the choice to take cash or gold on redemption, but the preference has to be stated at the time of deposit.
- The RBI has changed the Gold Monetisation Scheme (GMS) to make charitable institutions and the government entities eligible to deposit under the scheme.
- Apart from individual and joint depositors, the scheme could now be availed by charitable institutions, the central government, the state government or any other entity owned by the central government or the state government, the central bank said in a notification.
- To mobilize the gold held by households and institutions in the country
- To provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks.
- To be able to reduce reliance on import of gold over time to meet the domestic demand.
- Opening of Gold Savings Account with the banks.