India Govt Fixes Interest Rate on GMS

Mumbai: Entities participating in Gold Monetization Scheme can earn up to 2.50 percent interest rate on their idle gold.

Interest rate on Medium and Long Term Government Deposit (MLTGD) are 2.25 percent and 2.20 percent, respectively, according to a notification issued by the Reserve Bank of India (RBI) Tuesday.

The tenor of medium term would be between 5-7 years while long term would for 12-15 years tenure. The deposit under MLTGD category will be accepted by the designated banks on behalf of the central government.

The receipts issued by the Collection and Purity Testing Centre (CPTC) and the deposit certificate issued by the designated banks shall state this clearly.

The government had in September cleared the gold monetization scheme aimed at tapping part of an estimated 20,000 tons of idle gold worth about Rs 5,40,000 crore into the banking system.

The gold received under MLTGD will be auctioned by the agencies notified by the government and the sale proceeds will be credited to government’s account held with RBI, it said.

RBI will maintain the Gold Deposit Accounts denominated in gold in the name of the designated banks that will in turn hold sub-accounts of individual depositors, it added.