Gold Monetisation Scheme

Subject: Schemes

Context:

Six banks, led by State Bank of India (SBI), collectively mobilised 68 per cent more gold year-on-year (yoy) from households and temple trusts, among others, at 4,643.25 kg in 2019-20 against 2,763.12 kg the previous year under the Gold Monetisation Scheme (GMS).

Concept:

• Indians families keep a lot of gold lying idle at their homes. True that its value grows over time, keeping gold idle doesn’t come cheap. One has to spend on storage in a bank locker, or worry for its safety at home.
• The Gold Monetisation Scheme (GMS) was launched by the Government of India in 2015.
• The main aim of this scheme is to turn the unused gold which is lying idle at our households or institutions into a productive asset. The aim was to mobilise gold and further facilitate its use for productive purposes.
• The scheme would thus also reduce India’s dependability on gold imports.
• The depositors can deposit a minimum of 30 gms of raw gold in the form of bars, coins, jewellery. There is no cap on the maximum amount of gold that can be deposited. The deposits under GMS is held by banks on behalf of the Centre, who also decides the interest rate.The new scheme consists of revamped GDS (Gold Deposit Scheme) and revamped GML ( Gold Metal Loan) scheme.