What Is Gold Monetisation Scheme And Who Is Eligible To Make Deposits?

GMS, which modifies the existing 'Gold Deposit Scheme' (GDS) and 'Gold Metal Loan Scheme (GML) seeks to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to bring down country's reliance on the import of gold.

Are banks required to obtain RBI approval to participate in the Gold Monetisation Scheme, 2015?
No. However, banks should submit to RBI the implementation details including names of the Collection and Purity Testing Centres (CPTCs) and refiners with whom they have entered into tripartite agreement and the branches operating the scheme. Banks should also report the amount of gold mobilised under the scheme by all branches in a consolidated manner on a monthly basis in the prescribed format, according to RBI official website.

Who is eligible to make a deposit?
Resident Indians [Individuals, HUFs, Proprietorship & Partnership firms, Trusts including Mutual Funds/Exchange Traded Funds registered under SBI (Mutual Fund) Regulations, Companies, charitable institutions, Central Government, State Government or any other entity owned by Central Government or State Government], as per Reserve Bank of India website.

What is the procedure for a customer to make a deposit under the scheme? Does interest on deposit start accruing from Day 1 of depositing the gold with CPTC/GMCTA/designated branch?
An eligible depositor can open a Gold Deposit Account with any of the designated banks after meeting the KYC norms. Generally, deposits under the scheme shall be made at the CPTC/GMS Mobilisation, Collection & Testing Agent (GMCTA) which would then test the purity of the customers' gold in their presence and issue deposit receipts of the standard gold of 995 fineness to the depositor and also inform the customers' respective bank about acceptance of deposit.

The designated bank will credit Short-Term Bank Deposit (STBD) or Medium/Long-Term Government Deposit (MLTGD) account of the customer, as is applicable, either on the same day of receipt of deposit receipt by the depositor or within 30 days of deposit of gold at CPTC/GMCTA (regardless of whether the depositor submits the receipt or not), whichever is earlier.

Thereafter, the interest on deposits will start accruing from date of conversion of gold deposited into tradable gold bars or 30 days after receipt of gold at the CPTC/GMCTA, whichever is earlier.