Saturday, January 23, 2016

Gold Monetization Scheme, 2015 - Modified




(i) The existing sub-paragraph 2.1.1 (iii) shall be amended to read as follows:
 
The principal and interest on STBD shall be denominated in gold. In the case of MLTGD, the principal will be denominated in gold, but interest shall be calculated in Indian Rupees with reference to the value of gold at the time of the deposit.

(ii) The existing sub-paragraph 2.1.1 (iv) shall be amended to read as follows:

Persons eligible to make a deposit - Resident Indians (Individuals, HUFs, Proprietorship & Partnership firms, Trusts, including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the scheme. Joint deposits are also allowed and the deposit shall be credited to the joint account in the name of such depositors. The existing rules regarding operation of bank deposit accounts, including nominations shall apply to these gold deposits.

 (iii) The existing sub-paragraph 2.1.1 (v) shall be amended as below:

All deposits under the scheme shall be made at the CPTC. Banks may accept the deposit of gold at the designated branches, especially from the larger depositors.

Banks may also allow the depositors to deposit their gold directly with the refiners that have facilities to carry out final assaying and to issue the deposit receipts of the standard gold of 995 fineness to the depositor.

(iv)  The existing sub-paragraph 2.1.1 (ix) shall be amended to read as under:

Designated banks shall inform the RBI of their decision to participate in the Scheme as soon as the policy to implement the Scheme is approved by their Board. They shall also report to the RBI the gold mobilized under the Scheme by all branches in a consolidated manner on a monthly basis.


(v) A para No.2.1.1 (x) shall be included as below:

Tax implications on GMS shall be as notified by the Central Government.

(vi)  A para No.2.1.1 (xi) shall be included as below:

The quantity of gold will be expressed up to three decimals of a gram.

(vii)  The existing sub-paragraph 2.2.2 (iv) shall be amended to read as under:

 (a)   The Medium Term Government Deposit (MTGD) can be made for 5-7 years and Long Term Government Deposit (LTGD) for 12-15 years or for such period as may be decided by the Central Government.

(b)   The rate of interest will be decided by Central Government and notified by Reserve Bank of India. The current rate of interest are as under:

 (i) On medium term deposit  – 2.25% p.a.

(ii) On long term deposit         – 2.50% p.a.

(c)   The designated banks may allow whole or part premature withdrawal of the deposit subject to minimum lock-in period and penalties as under:

(i)  Minimum lock-in period

A Medium Term Government Deposit (MTGD) is allowed to be withdrawn any time after 3 years and a Long Term Government Deposit (LTGD) after 5 years.

(ii)  Penalty on premature withdrawal

The amount payable to the depositor on premature withdrawal shall be calculated as a sum of (A) and (B), as indicated below:

(A)    Actual market value of the gold deposit on the day of withdrawal.

(B)    Interest payable on the value of the gold at the time of deposit as under.
Type of deposit
Lock in period
Actual period for which the deposit has run (yrs)


>3 and < 5
≥5 and < 7
MTGD
3 yrs
Applicable rate on MTGD at  the time of deposit  -0.375%
Applicable rate on MTDG at the time of deposit  -0.25%

Type of deposit
Lock in period
Actual period for which the deposit has run (yrs)


>5 and < 7
≥ 7 and < 12
≥12 and < 15
LTGD
5 yrs
Applicable rate on MTGD at  the time of deposit  -0.25%
Applicable rate on LTGD at  the time of deposit  -0.375%
Applicable rate on LTDG at the time of deposit  -0.25%


(viii) A para No.2.2.2 (ix) shall be included as under:

Central Government has decided that for initial period of one year, designated banks will be paid handling charges for MLTGD at a flat rate of 1.5% and commission at the rate of 1%.

Explanation: For the purpose of computing the charges and commission payable to banks, the rupee equivalent of the gold deposited shall be calculated based on the price of gold prevailing at the time of deposit.

 (ix) The existing sub-paragraph 2.4 (i) shall be amended to read as under:
 
The Central Government will notify the list of BIS certified CPTC / Refiners under the
Scheme and shall be communicated to the banks through IBA.

(x) A para No. 2.6 (iii) shall be included as under:

The tripartite agreement shall have enabling provision for direct deposit of gold with the refineries as well. In the alternate, banks shall enter into bipartite agreements with the refiners, stating out the terms of that arrangements besides the tripartite agreement.

Based on RBI Circular dt 21/01/16. Please visit www.rbi.org.in for any further clarification if required….. Poppy