RBI to tweak gold monetisation scheme

“Banks are now in talks with institutions and temples to popularise the gold monetisation scheme”.

“This (SGB) scheme saw an overwhelming response from the investors throughout the country and initial figures show that about 63,000 applications were received for a total of Rs 246.20 crore by the banks and post Offices for 917 kgs of gold”, a Finance Ministry statement said on Friday.

Aimed at providing an alternative to physical gold, the government had sold gold bonds through banks and post offices between November 5 and November 20. Concerned over the underwhelming response, the gems and jewellery industry representatives had met economic affairs secretary Shaktikanta Das last week to discuss ways of making the scheme lucrative.

The main objective of the SGB scheme is to reduce the demand for physical gold and shift a part of the gold imported every year for investment purposes into financial savings through Gold Bonds. The RBI will issue more such bonds in tranches.

The scheme, launched by Prime Minister Narendra Modi on November 5, has received a “slow response”, according to the ministry.

“There has been a mixed response to these schemes from the public”, the release said.

India meets most of its domestic demand for gold through imports which pressures the country’s current account deficit. Fees levied by banks for testing, transporting, refining and storage services at collection centres and refiners will be reimbursed based on actuals.

In the meeting, a number of decisions were taken to improve the reach of the scheme.

“This will encourage the bulk depositors like Hindu Undivided Families (HUFs) and institutions to participate in the scheme”, the statement said.

The licensing condition has modified by the Bureau of Indian Standards(BIS) to refiners, which likely increase the numbers of gold refiners licences to almost 20.

For the improvement or to increase the awareness of Gold Scheme, The government continuously campaign in print media, radio, television and social media.

The industry associations urged the government to allow BIS certified jewellers to act as collection agent for the gold monetisation scheme and the finance ministry had given an in-principle nod to the suggestion.

Above two schemes are innovative schemes and these are early days of implementation.