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Share your views on Draft Gold Monetization Scheme

Share your views on Draft Gold Monetization Scheme
Start Date :
May 19, 2015
Last Date :
Jun 02, 2015
17:00 PM IST (GMT +5.30 Hrs)
Submission Closed

The Finance Minister in his budget speech for the Union Budget 2015-16 made the following announcement: “India is one of the largest consumers of gold in the world and imports as ...

The Finance Minister in his budget speech for the Union Budget 2015-16 made the following announcement: “India is one of the largest consumers of gold in the world and imports as much as 800-1000 tonnes of gold each year. Though stocks of gold in India are estimated to be over 20,000 tonnes, most of this gold is neither traded, nor monetized. Keeping this in view, the government in Budget 2015-16 has announced the Gold Monetization Scheme which will replace both the present Gold Deposit and Gold metal Loan Schemes. The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks/other dealers would also be able to monetize this gold”.

Accordingly, a draft outline of the Scheme has been prepared. Comments and views are invited on the Draft Gold Monetization Scheme.

Draft Gold Monetization Scheme (The outline of the Gold Monetization Scheme placed below is only at the draft stage and is being placed here to obtain public opinion. The scheme as it stands at this stage, does not imply any commitment from the government)

The last date to share your views is 2nd June, 2015 by 5:00 p.m.

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Showing 566 Submission(s)
Nilanjan Karfa
Nilanjan Karfa 11 years 2 months ago
Third, from consumer/investor standpoint, if one ever invested in gold using clean money, then he would be paying for the locker to store it. Instead, the sovereign will now pay money for me to store the gold with them. So instead of buying 100gm/500gm biscuits, I may inch up my trade to 5000gm. I am only limited by my savings/clean money here. If everyone does this including HNIs, the price of gold will skyrocket.
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Nilanjan Karfa
Nilanjan Karfa 11 years 2 months ago
By paying back the gold deposit in kind i.e. gold, the sovereign is creating a short position in a commodity which it does not produce unlike money which can be created. For large quantity of gold coming through, hedging the position may not even be possible through a call/future and that too domestically. Second, if traders get even a whiff of the short position covering coming in the next few days, the gold market can be made to artificially dry up.
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Aniket_12
Aniket_12 11 years 2 months ago
I also do not buy into the argument that Gold imports need to be reduced to reduce current account deficit. Boost your industry and increase exports to reduce deficits. Look at China. China is now officially the largest gold importer as well as largest gold producer in the world but never did they try to curb gold imports with a bogus argument of current account deficits. They built their industry and boosted exports, became the largest exporter in the World and built up a sizable reserve ratio.
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Aniket_12
Aniket_12 11 years 2 months ago
* Also for physical gold delivery (and even at the time of deposit) ultrasonic testing must be carried out on gold bars/coins. Tungsten having almost the same density as gold is an excellent metal for gold adulteration and such cases are already occurring all around the world where a tungsten bar is coated with a thin layer of gold. Since density of tungsten is the same, external dimensions and weight or surface acid tests are not sufficient to completely verify the entire bar/coin is pure gold.
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Aniket_12
Aniket_12 11 years 2 months ago
I would like to have this clause added to the gold deposit agreement: * Banks can never be allowed to default on physical gold delivery i.e. if a person at the time of signing the gold deposit agreement chooses to be given physical gold (with interest) must get physical gold and should not be asked to settle for cash at the maturity of the deposit term.
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Bharat jain
Bharat jain 11 years 2 months ago
I think there is no benefit at large, it will make financial loss to government and public as scheme wont run at large scale
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AMIT KANKARWAL
AMIT KANKARWAL 11 years 2 months ago
Sir Tax-free interest on deposits is a welcome step. i have a suggestion regarding the melting process involved after deposition.it would take too much time if not done at the bank premises itself. also depositor should have the choice of getting cash or gold at the time of redemption and he should not be asked about it upfront (1 year earlier).
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JAGDISH PATHAK
JAGDISH PATHAK 11 years 2 months ago
If the gold and ornaments kept in original form without converting into bars, than, middle and lower people can participate in scheme. The gold can only be utilised for keeping in reserves and deposited to RBI. Middle/lower class will not take much benifit of such scheme, becuase approx.15% gold value decreased in melting etc., while, 10% charges will be for making ornaments when they want to prepared.Some solution should be find in large public interest.
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