Mumbai: The bullion industry has proposed a gold monetisation scheme, where gold deposits will be treated just as currency deposited in a bank, as a solution to getting out some of the 20,000 tonnes of gold lying idle with the people. The gap between the supply and demand of gold is 250 tonnes and if even ten per cent of this idle gold 2,500 tonnes is brought out it is more than enough to meet demand.
Explaining the gold scheme in Mumbai on Tuesday, Rajesh Khosla, managing director, MMTC Pamp, said the Gold Monetisation Scheme would treat gold like currency.
“Just as one has a savings deposit account, one can have a metal savings account which could even be in the form of a fixed deposit etc., at different rates of interest given by the bank. The interest earned on this gold will be tax free so it is a big advantage. Under the GMS the person can make a minimum deposit of 40 grams of gold in the same bank as he has his savings deposit.”
At the end of the term of the deposit the depositor will get his gold back plus a little extra as interest. Say if one deposited 35 grams one would get back 36.5 grams in gold.
For the banks it’s a win win situation as they can keep the gold as their portion of the statutory reserves required by the RBI.
Srivatsava G., president, Foretell Business Solution Pvt Ltd said that all the reforms like the Gold Control Act 2003 and the 2007 Gold ETFs etc., that the government undertook from 1991-93 to bring down the premium on gold from 45 per cent to just 0.7 per cent by 2008-09 and killing the hawala business, has been nullified by the 10 per cent duty on imports and the 80:20 scheme.
It has revived smuggling which has touched an estimated 200 tonnes.
