Earn interest on idle gold, Modi to launch schemes on Nov 5

Gold deposited by households to gold savings accounts will be used for auctioning, replenishment of RBI's gold reserves

Prime Minister Narendra Modi will launch three new schemes - the Gold Monetisation Scheme (GMS), Sovereign Gold Bond Scheme, and the Gold Coin and Bullion Scheme - in New Delhi on Thursday, according to an official Finance Ministry statement.

The GMS consists of a revamped Gold Deposit Scheme and Gold Metal Loan Scheme. Under GMS, gold deposited by households to gold savings accounts will be put to use for auctioning, replenishment of the Reserve Bank India's (RBI's) gold reserves, coins and lending to jewellers. The tenures of deposits can be for a short term of one to three years, a medium term of five to seven years or a longer term of 11 to 15 years.

The RBI will start issuing sovereign gold bonds on November 26, with a tenure of eight years and an interest rate of 2.75 per cent. The bonds will be open for public subscription from November 5 to 20. The tenure of the bond will be for a period of eight years with exit option from the fifth year. The bonds will be restricted for sale to resident Indian entities only - including individuals, trusts, universities, and charitable institutions. The interest earned on gold bonds would be taxable, and capital gains tax shall be levied as in case of physical gold.

As for the gold coin scheme, initially, the coins will be available in denominations of five and 10 gms. A 20-gm bar or bullion will also be available. About 15,000 coins of five gm, 20,000 coins of 10 gm and 3,750 gold bullions will be made available through MMTC outlets. The Indian gold coin is unique in many aspects and will carry advanced anti-counterfeit features and tamper-proof packaging that will aid easy recycling.

Additionally, the government will also issue a list of designated post offices for the Sovereign Gold Bond Scheme.

ADDING SHEEN

• The scheme consists of a revamped Gold Deposit Scheme and Gold Metal Loan Scheme
   
• The bonds will be open for public subscription from November 5 to 20
   
• Initially, the coins will be available in denominations of five and 10 gms
   
• About 15,000 coins of five gm, 20,000 coins of 10 gm and 3,750 gold bullions will be available