What is Gold Monetisation Scheme (GMS)?
Gold Monetisation Scheme (GMS), which modifies the existing Gold Deposit Scheme (GDS) and Gold Metal Loan Scheme (GML), is set to utilize gold held by households and institutions of the country for fruitful purposes. In long term, this will help the country to reduce its dependence on the import of gold. The minimum deposit at one time should be 30 grams of 995 fineness of raw gold (bars, coins, jewellery excluding stones and other metals).There is no maximum limit for deposit under this scheme.
Under this scheme, it is important to check the gold’s purity. This purity check will be done through collection and Purity Testing Centres (CPTC). Collection and Purity Testing Centres (CPTC) are collection and evaluating centres certified by the Bureau of Indian Standards (BIS) and notified by the Central Government for the purpose of handling gold deposited and redeemed under GMS.
All Scheduled Commercial Banks excluding RRBs will be eligible to implement the Scheme. The principal and interest of the deposit under the scheme shall be denominated in gold.
Types of deposits under Gold Monetisation Scheme (GMS)
There shall be two different gold deposit schemes as under:
- Short Term Bank Deposit (STBD): Under this scheme, deposit will be made with the designated banks for period of 1-3 years with a roll over in multiples of one year.
- Medium and Long Term Government Deposit (MLTGD): Under this scheme, deposit can be made for a medium term period of 5-7 years or a long term period of 12-15 years. The rate of interest of deposit will be decided by Central Government and notified by Reserve Bank of India from time to time. The All Scheduled Commercial Banks excluding RRBs that will decide to implement the Scheme may allow whole or part premature withdrawal of the deposit subject to any minimum lock-in period and penalties, if any, as decided by the Central Government.
Benefits on Opening an Account
- The gold monetization scheme provides interest for your gold jewellery, Coins and bars lying in your locker apart from the appreciation of value
- Gold will be safely maintained by your bank
- Redemption is possible in physical gold or rupees thus providing your gold purchase further earning opportunity.
- Earnings are exempted from capital gains tax (on the appreciation in the value of gold deposited, or on the interest you make from it), wealth tax and income tax.