Prime Minister Narendra Modi on Thursday launched three programmes aimed at reducing physical gold demand and luring tonnes of gold from households into the banking system.
The three schemes that Modi launched are Gold Monetisation Scheme (GMS), Gold Sovereign Bond Scheme and the Gold Coin and Bullion Scheme. Modi also unveiled the first ever national gold coin minted in India with the national emblem of Ashok Chakra engraved on it.
The Gold Monetisation Scheme will replace the existing Gold Deposit Scheme, 1999. However, deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them.
The Gold Monetisation Scheme is aimed at tapping part of an estimated 20,000 tonnes of idle gold worth Rs. 5,40,000 crore in family lockers and temples into the banking system.
The Gold Sovereign Bond will be issued by the Reserve Bank of India (RBI) on behalf of the government with an interest rate of 2.75%. The bonds will be sold through banks and designated post offices.
Describing the schemes as “sone pe suhaga” (icing on the cake), Modi said gold has often been a source of women’s empowerment in the Indian society, and these schemes will underscore that sense of empowerment.
“Women in India usually don’t own house or a car in their name, but gold is a matter of their strength. India has 20,000 tonnes of idle gold. It is an important aspect of women empowerment,” Modi said while speaking at the launch, “people should take advantage of the golden opportunity to help India march to a golden period.”
“India has surpassed China as world’s largest gold consuming nation with 562 tonnes of buying so far this year,” he added.
India’s obsession with gold is rivalled only by China, with the metal used widely in wedding gifts, religious donations and as an investment.
Previous attempts at mobilising this gold have been unsuccessful, but PM Modi is hoping higher interest rates paid will help it to succeed this time.
