Niti for considering deposits under gold monetisation scheme as CRR

The committee also recommended that the transfer of gold collected under the scheme should be exempt from the purview of GST

Government think-tank Niti Aayog has suggested that deposits mobilised by banks under the Gold Monetisation Scheme should be included in the cash reserve ratio.

In a report, the committee headed by Niti Aayog Principal Adviser Ratan P Watal also recommended that the transfer of gold collected under the scheme (GMS) should be exempt from the purview of GST.

"Deposits mobilized under GMS may be considered for CRR," the committee suggested.

It further said the government could consider initially setting up a Bullion Exchange in GIFT-IFSC to be an additional option in the choice of venue for trade for the global market participants and to be the primary intermediary for all gold imports and exports.

"In due course more exchanges may be set up in the domestic markets," the committee, which was constituted to recommend measures to transform India's gold market, suggested.

In 2015, the government launched the GMS with the objective of mobilising the gold held by households and institutions in the country.

The scheme allows banks' customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2.25 per cent to 2.50 per cent.

Recently, the Reserve Bank of India (RBI) had made changes in the Gold Monetisation Scheme (GMS) to make it more attractive.

The revamping of the scheme was aimed at enabling people to open a hassle-free gold deposit account.

The short-term deposits should be treated as bank's on-balance sheet liability, the RBI said in a notification in June.