India has launched a gold monetisation scheme In a bid to bring into the banking system an estimated 20,000 tonnes of gold worth Rs 540,000 crore held mainly in family lockers and temple vaults. The scheme, launched by Prime Minister Narendra Modi will replace the 1999 Gold Deposit Scheme though deposits under the older plan will be allowed to run until their maturity.
Under the new scheme, the minimum deposit at one time will be raw gold equivalent of 30 grams. There is no maximum limit. Banks will issue deposit certificates in equivalence of the gold deposited with them and the principal and interest of the deposit will be denominated in gold. The Reserve Bank of india has notified an interest rate of 2.25 percent for medium term deposits and 2.5 percent for the long-term deposits.
Modi also unveiled the first national gold coin, minted in India with the Ashoka Chakra engraved on it. The gold coin and bullion scheme is part of the gold monetisation programme. Initially the coins will be available in denominations of five and 10 grams—initially, 15,000 five-gram coins and 20,000 10-gram coins will be launched. A 20-gram bullion bar will also be launched—about 3,750 such bars will be available at MMTC (Mine and Mineral Trading Centre) outlets.
Modi also launched the Gold Sovereign Bond, to be issued by the Reserve Bank of India on behalf of the government of India with an interest rate of 2.75 percent. The bonds are to be sold through banks and designated post offices. The bonds will be denominated in multiples of grams of gold. The maximum subscription is 500 grams per person per fiscal year.