India Gold deposits to get 2.25-2.5% returns
Mumbai-India (Nov 5) On Thursday, Prime Minister Narendra Modi formally launched the government’s much-awaited schemes for monetisation of citizens’ gold holdings. The function was in Delhi, at the PM’s residence.
Depositors will get a 2.25 per cent interest rate for medium-term deposits and 2.5 per cent for long-term ones. Principal and interest under the scheme will be denominated in gold.
The tenure for short-term deposits will be one to three years, medium-term will be five to seven years and long-term tenure will be 12-15 years. The short-term rate will be decided by each bank. State Bank of India's are 0.5 per cent for one year, 0.55 per cent for two years and 0.6 per cent for three years.
A source in the State Bank of India (SBI) said they'd decided the rates on their costing and the lending rates for gold to jewellers. Banks are not giving any targets for mobilising gold under the scheme.
A customer has to go to a hallmarking centre, certified by the Bureau of Indian Standards as a Collection and Purity Testing Centre (CPTC) for the scheme. It will decide the purity of the gold, melt it and give a certificate to the customer, based on which the bank which has an agreement with that centre will open a deposit account.
An agreement has to be signed between a bank, a centre and the gold refinery. The first such was signed in the presence of the PM — between ICICI Bank, Mahavir hallmarking centre in Mumbai and Shipur refiney.
K Anand Kumar, secretary, Association of Hallmarking Centers of India, present at the launch function, said: "Today, five customers tendered gold for monetisation and were issued gold deposit certificates. These include a lady, a child and a minority community customer.”
Nearly 40 CPTCs have been certified till date and 12 banks are participating from the first day. Others are likely to join.
The PM also launched Ashok Chakra-embossed gold coins of five, 10 and 20g, to be sold by government-owned MMTC Ltd through its dealer network and outlets. These coins will come from the Government of India mint.
A sovereign gold bond scheme was also launched on Thursday. The first tranche is to close on November 20 and the bonds will be issued on November 26. The price for a gramme of gold is fixed at Rs 2,684.
While launching these schemes, the PM said: “India has no reason to be described as a poor country, as it has 20,000 tonnes of gold. The gold available should be put to productive use and these schemes show us the way to achieve this goal.”
He said gold had often been a source of women's empowerment in Indian society and these schemes would underscore that.
The PM also launched a website on these schemes and distributed certificates of investment to six people.