Govt. to introduce gold monetising scheme

Finance Minister Arun Jaitley on Saturday proposed the introduction of a gold monetising scheme, which will allow depositors of gold to earn interest on their metal accounts.

"Stocks of gold in India are estimated to be over 20,000 tonnes but this gold is mostly neither traded, nor monetised. I propose to introduce the Gold Monetisation Scheme, which will replace both the present Gold Deposit and Gold Metal Loan schemes. This new scheme will allow the depositors of gold to earn interest in their metal accounts and jewellers to obtain loans in their metal account. Banks and other dealers would also be able to monetise this gold," Jaitley said in his 2015-16 budget speech in Parliament.

"We will also look at an alternate financial asset, the sovereign gold bond, as an alternative to purchasing metal gold. The bonds will carry a fixed rate of interest, and be redeemable in case in terms of the face value of the gold, at the time of redemption by the holder of the bond," he added.

Jaitley further announced that the government will develop an Indian gold coin in order to reduce the demand for coins minted abroad.

"The government shall commence work on developing an Indian gold coin, which will carry the Ashok Chakra on its face. Such Indian gold coins would help reduce the demand for coins minted outside India and help to recycle the gold available in the country," he said.