Monday, 26 March 2018

What is the Gold Monetization Scheme

As 24 Carat Financial Services is known to extends highly reliable MCX trading tips, it has also earned its name by providing a robust data or knowledge base to its customers. The Gold Monetization Scheme (GMS) is a scheme that allows eligible resident investors including individuals, HUFs, Trusts and companies to monetize the gold held by them into interest earning deposits with all Scheduled Commercial Banks, excluding RRBs. The gold can be in the form of coins, bars and jewelry. The gold deposited under the scheme should be assayed by the Central Purity Testing Centre (CPTC) and converted in tradable gold bars of 995 purity after refining.  The minimum gold that can be deposited under the scheme is 30gms and there is no maximum limit. The gold can be converted into Short term bank deposits (1-3 years) which will earn interest at the rate fixed by the respective bank. The interest will be credited periodically to the account and can be either withdrawn or allowed to accumulate till maturity. On completion of the term of deposit, the prevailing value of the deposited gold and accumulated interest, if any, will be repaid either in rupees or gold as chosen by the depositor at the time of making the deposit. Medium Term Bank Deposit (5-7 years) and Long Term Bank Deposit (12-15 years) will be accepted by the designated bank on behalf of the Central Government, unlike the short term deposit which is the liability of the bank accepting it. The interest applicable currently on the medium term deposit is 2.25% and long term deposit is 2.5%. Pre-mature redemption, either partially or fully, may be allowed by the designated bank subject to any lock-in period and penalties imposed by the bank. The redemption will be made only in rupees at the prevailing value of gold at the time of redemption.

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