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PM Gold Monetization Scheme


Prime Minister Narendra Modi has just launched the gold monetisation scheme in New Delhi, along with gold sovereign bonds and the Indian gold coin. The schemes were launched on schedule ahead of Dhanteras, as targeted by the government.

Ahead of the launch, the Reserve Bank of India (RBI) had released a circular for the implementation of the Gold Monetisation Scheme, 2015. The scheme was first spoken about in the 2015-16 budget statement by Finance Minister Arun Jaitley. 

Gold monetisation schemes will help monetise gold worth nearly Rs 60 lakh crore held by households and institutions.


Here are 10 important things to know about the directive:

1) The Gold Monetisation Scheme will replace the Gold Deposit Scheme of 1999. However, people who have deposited gold under the deposit scheme need not worry. All the gold deposited under the 1999 scheme will be allowed to run till its maturity date, unless the depositor withdraws it prematurely.

2) Who can park gold under monetisation scheme?: Resident Indians (Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the scheme.

3) Minimum/ maximum deposit: 30 grams of 995 finenes in raw gold (bars, coins, jewellery, exclusind stones and other metals).  There is no maximum limit under the scheme.


4) Who will accept the gold?

The collection and Purity Testing Centres (CPTC) certified by the Bureau of Indina Standards (BIS) and notified by the Central government under then scheme, will accept the gold. Against the gold deposited in the scheme, banks will issue deposit certificates in equivalence of 995 fineness of gold.

5) Tenure: Banks will accept gold for short term investment of one to three years, medium term deposit of five to seven years, and long term deposit of 12 to 15 years. While designated banks can accept deposits for short- and medium-term deposits, long-term deposits will be accepted on behalf of the government.

6) Interest payout: Interest on deposits under the scheme will start accruing from the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold at the CPTC or the bank’s designated branch, as the case may be and whichever is earlier.

7) KYC: Depositors interested in depositing gold under the scheme will be subject to the same KYC norms and identification applicable to opening a bank deposit account.

8) Grievances: Complaints against designated banks regarding any discrepancy in issuance of receipts and deposit certificates, redemption of deposits, payment of interest will be handled first by the bank’s grievance redress process and then by the Reserve Bank’s Banking Ombudsman.

9) Premature withdrawal: Individual banks will determine a provision for premature withdrawal subject to a minimum lock-in period and penal

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