India Nets 1,131 Kg. Gold under GMS

New Delhi: The government of India has netted a hefty 1,131 kg of gold valuing Rs 3,014 crore under the Gold Monetisation Scheme (GMS), the Parliament was informed on Friday.

“Under the scheme 1,131 kilograms of gold valuing Rs 3,014 crore have been deposited by 71 depositors so far,” Minister of State for Finance Jayant Sinha said in a written reply to Lok Sabha.

The Gold Monetization Scheme, which had not picked up initially, was fine-tuned to make more attractive and convenient for entities holding idle gold.

Depositors will earn up to 2.50% interest per annum on the gold, a rate lower than savings bank deposits.

As per the scheme launched on November 5, banks were authorised to collect gold for up to 15 years to auction them off or lend to jewellers from time to time.

A total of 46 Assaying and Hallmarking Centres are qualified to act as Collection and Purity Testing Centres (CPTC) for handling gold under the scheme.

Sinha further said during the two tranches of Sovereign Gold Bond Scheme so far, 3,786 kilograms of the metal amounting to Rs 992 crore have been subscribed from 3,80,617 investors.

The gold bonds are issued in denominations of 5, 10, 50 and 100 grams for a term of 5-7 years with a rate of interest to be calculated on the value of the metal at the time of investment. The scheme has an annual cap of 500 grams per person.

The government has fixed the rate of interest on gold bonds for this fiscal at 2.75% per annum, payable on half-yearly basis . India imports about 1,000 tonnes of gold every year and the precious metal is the second highest component of the imports bill after crude oil. An estimated 20,000 tonnes of gold are lying with households and temples.

The schemes are aimed at reducing demand for gold in physical form by encouraging people to buy the commodity in demat or the paper form.

During April-December period this fiscal, gold imports increased to $26.45 billion as against $25.85 billion in the same period last year.

Replying to a query, the minister said in order to increase the life of bank-notes, it has been decided to conduct a field trial with plastic banknotes at five locations of country.