Govt likely to again change GMS rules

According to data given by the ministry, 3 tons of gold has been mobilized under the scheme so far

The Union finance ministry said on Friday it would make further changes in the Gold Monetisation Scheme (GMS), which hasn't been able to attract many takers.

This was after a meeting here with stakeholders. Only three tonnes of gold have come so far; it was a little over a tonne till the first week of February. It was launched last November and, after the tepid interest, was modified towards the end of January. Clearly, that wasn't enough.

Read more from our special coverage on "GOLD MONETISATION SCHEME"

• Government calls meet to review gold monetisation scheme

Shaktikanta Das, secretary, department of economic affairs, said after the meeting, “We reviewed the difficulties and took suggestions. These are under consideration. In the long term, the scheme should succeed.”

Among the key proposals a ministry official said they were considering are “a proposal from Indian Bullion and Jewellers Association (Ibja) to act as an aggregator and offer an alternative to the hallmarking centres which have to play the role of collecting and purity testing centres. There was another suggestion to increase the tenure for gold loans by banks. The National Commodity and Derivatives Exchange (NCDEX) has proposed that GMS be implemented as a parallel to banks within its platform".

NCDEX is an electronic platform and can recognise stakeholders, including refineries, to ensure delivery of gold under the scheme. Ibja said jewellery shops will act as collection centres, test the gold or jewellery for purity and issue a certificate right away; then, deposit pure gold to the respective banks within 48 hrs. The Association, it said, would stand guarantee for such collections made by members. Ibja proposed to appoint 1,000 such centres.

K Anand Kumar, secretary of the Indian Association of Hallmarking Centres, said: “Banks are taking too much time in signing tripartite agreements (with their members and refineries).

In the south, none of the banks have approached any CPTC (collecting centre under GMS) to sign such agreements, even when many a CPTC has done an agreement with gold refineries.”

The ministry issued a tweet about the recently concluded sovereign gold bonds' third issue, that “it is gradually picking up among investors, with increased clarity & awareness about it”.

According to the ministry official, “The proposed tweaks in GMS can be applied retrospectively.”

Shaktikanta Das said, “Some temple trusts have started showing interest.” Temples are considered the main source for mobilising idle gold.