New Gold Schemes Launched in 2015

Government had launched Sovereign Gold Bonds and Gold Monetisation Schemes on 5th November, 2015. The main objectives of the schemes are to reduce the demand for physical gold and shift a part of the gold imported every year for investment purposes into financial savings.

Sovereign Gold Bonds

  • These are issued by RBI on behalf of the Government of India in rupees and denominated in grams of gold and restricted for sale to the resident Indian entities only both in demat and paper form.
  • The minimum and maximum investment limits are two grams and 500 grams of gold per person per fiscal year respectively. The rate of interest for the year 2015-16 is 2.75 per cent per annum, payable on a half yearly basis.
  • The tenor of the Bond is for a period of 8 years with exit option from 5th year onwards. KYC norms are the same as that for gold. Exemption from capital gains tax is also available.
  • Redemption is made in the rupee value equivalent to the price of gold at the time of maturity. In the first two tranche of SGB total subscription of 3788 kilograms of gold amounting to 993 crore were received from about 3.90 lakh applications.

Gold Monetization Scheme

  • Bureau of Indian Standards (BIS) certified Collection, Purity Testing Centres (CPTC) collect the gold from the customer on behalf of the banks. The minimum quantity of gold (bullion or jewellery) which can be deposited is 30 grams and there is no limit for maximum deposit.
  • Gold Saving Account can be opened with any of the designated bank and denomination in grams of gold for short-term period of 1-3 years, a medium-term period of 5-7 years and a long-term period of 12-15 years .The CPTCs transfer the gold to the refiners. The banks will have a tripartite / Bipartite Legal Agreement with refiners and CPTCs.
  • For the year 2015-16 interest rates has been fixed as 2.25 percent and 2.5 percent for the medium and long term respectively. Redemption is made in cash/gold for short term and in cash for medium and long term deposits. Tax exemption are same as those available under GDS 1999.
  • The difference between the current borrowing cost for the Government and the interest rate paid by the Government under the medium/long term deposit shall be credited to the Gold Reserve Fund. As of 2 February 2016, a total of 1030.2 kilo grams of gold have been mobilized through the scheme
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