In the Union Budget 2015, the finance Minister proposed a Gold Monetisation scheme on hopes that it may reduce reliance on import of gold over time to meet the domestic demand.
The main objective of the scheme is to provide a positive stimulus to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks.
Also read: Gold Monetisation Scheme: 5 Must-Know Points
Here are 5 points to Know about the gold savings account.
1) Gold Savings Account
When the customer produces the certificate of gold deposited at the Purity Testing Centre, the bank will in turn open a ‘Gold Savings Account' for the customer and credit the ‘quantity' of gold into the customer's account. Simultaneously, the Purity Verification Centre will also inform the bank about the deposit made.
2) Interest payment by banks
The bank will commit to paying an interest to the customer which will be payable after 30/60 days of opening of the Gold Savings Account. The amount of interest rate to be given is proposed to be left to the banks to decide.
Both principal and interest to be paid to the depositors of gold, will be ‘valued' in gold. For example if a customer deposits 100 gms of gold and gets 1 per cent interest, then, on maturity he has a credit of 1 gms.
The customer will have the option of redemption either in cash or in gold, which will have to be exercised in the beginning itself (that is, at the time of making the deposit).
The tenure of the deposit will be minimum 1 year and with a roll out in multiples of one year. Like a fixed deposit, breaking of lock in period will be allowed.
5) Tax Exemption
In the Gold Deposit Scheme (1999), the customers will receive exemption from Capital Gains Tax, Wealth Tax and Income Tax. Similar tax exemptions are likely to be made available to the customers in the GMS after due examination.