PNB Gold Monetization Scheme: All You Need To Know About

Punjab National Bank offers gold holders a Gold Monetization Scheme (GMS) scheme which provides them gold security, interest earnings, and other benefits. The GMS aims to mobilise gold owned by individuals and institutions in the country and make it more accessible for profitable use. Gold coins, bars, and unworn jewellery can be deposited under the scheme to earn competitive interest rates. PNB recently posted about the scheme from its official Twitter account. According to the tweet, "Stocking up gold under Gold Monetization scheme> Stocking up in lockers."

Eligibility Criteria

To make gold deposits, resident Indians of the following categories are eligible according to the bank.

• Individuals
• HUFs
• Proprietorship & Partnership firms
• Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations
• Companies or charitable institutions
• Central Government
• State Government or any other entity owned by Central Government or State Government.
• Joint accounts of two or more eligible depositors are also permitted under the scheme, and such deposits will be credited to a joint bank account maintained in their names.

Type of deposit

A deposit of at least 10 grams of gold with no maximum limit can be made, and the following are the types of deposits that can be made under the scheme. Note that on behalf of the Central Government, the bank will consider Medium Term and Long Term deposits. The scheme accepts gold in its purest form, such as gold bars, coins, and jewellery. Customers must submit an application form, proof of identity, proof of address, and an inventory form while making their deposits.

Type of Scheme	Tenor (in Year)
Short Term Bank Deposit (STBD)	1-3
Medium Term Government Deposit (MTGD)	5-7
Long Term Government Deposit (LTGD)	12-15

Rate of interest and payment

The deposit on a Short Term Bank Deposit (STBD) is represented in gold, and the interest is computed using the current value of gold at the time of deposit. On maturity, the interest rate for the withdrawal period will be 2.25 percent per annum for Medium Term Government Deposits and 2.50 percent per annum for Long Term Government Deposits. The deposit underlying Medium Term and Long Term deposits will be represented in gold. The interest, on the other hand, will be paid in Rupees on the 31st of March each year or at maturity, whichever comes first. The depositor will have the choice of receiving simple interest payments yearly or cumulative interest payments at maturity.

(i) Short Term Bank Deposit(STBD):
Period	Rate of Interest PA
1 year	0.50%
Above 1 year up to 2 years	0.60%
Above 2 years up to 3 years	0.75%

Premature withdrawal

Premature withdrawal from a Short Term Bank Deposit (STBD) may be authorised. However, no interest will be paid if the deposit is withdrawn before one year has elapsed from the commencement of the deposit. In all other circumstances, a 0.15 percent penalty will be applied. Premature withdrawals are also permitted on medium-term deposits at any time after three years with a penalty on interest, and on long-term deposits at any time after five years with a penalty on interest. Furthermore, any early redemption will be in INR equivalent or gold at the bank's sole discretion.