Govt mulls recurring gold deposit scheme

The ministry is working on a scheme for investors to buy Rs 300-500 of gold per month

The finance ministry is considering a recurring deposit scheme for gold in banks or post offices.

Sources said the government had reduced imports of more than 10 tonnes of gold through several tranches of the sovereign gold bond scheme and the recurring deposit scheme would accommodate investors who could not afford the Rs 3,000 for 1 gm of gold, the minimum investment in the bond.

The ministry is working on a scheme for investors to buy gold by paying Rs 300-500 a month. The recurring gold deposit scheme could address the needs of rural investors.  The gold will be credited in decimals of grammes till maturity of the recurring deposit scheme, which could be up to 10 years. On maturity the depositor will receive money equivalent to the total gold credited in her passbook at the prevailing bullion price.

Every tranche of gold bonds, in contrast, matures after eight years and investors can sell the bonds on stock exchanges.

No interest will be paid in the recurring gold deposit scheme, a source said.

A scheme on these lines was proposed by the India Bullion and Jewellers Association. Surendra Mehta, secretary of the IBJA, said discussions with the finance ministry were on. The scheme is likely to be called the Sukanya Swarna Jama Yojana.

The scheme is another initiative towards bullion banking, which will lend gold collected in a monetisation drive or imported by banks to borrowers.
RECURRING GOLD DEPOSIT SCHEME

• Scheme will target small depositors and rural investors
   
• No interest will be paid in this scheme
   
• One can invest as low as Rs 300
   
• Gold will be credited in decimals of grammes till maturity of the scheme
   
• On maturity, the depositor will get money equivalent to the total gold credited in her passbook