Gold Monetization Scheme Enables Investors to earn interest in the form of Gold
According to The Economic Times, the proposal of Gold Monetization Scheme allows users to obtain interest in the form of gold not in rupees. Under this scheme, the deposited gold is treated as fixed deposits. It was proposed by the bullion industry and is yet to be approved by banks. It is anticipated to come into force from January. Approximately 25,000 tonne of gold lies idle in the households.
The main idea behind the scheme is to liquidate such gold and enhance the accessibility of gold in the market.
Retail customers can open their gold accounts with the proposed banks and can deposit it for a maximum tenure of three years. The rate of interestwill be decided based on the prevalent interest scenario. The main attraction of this scheme is that it pays the interest in the form of gold on the maturation of gold deposit which yields more gold for the investors. Banks can lend this gold to jewelers, or deposit it with the Reserve Bank of India. Thus, it will help in rupee liquidity and in gaining more earnings.
This programme is intended to be performed by MMTC PAMP India which is a joint venture between MMTC, a government of India undertaking and PAMP Switzerland, a bullion brand which privately-owns precious metals processing facility.