Narendra Modi
Prime Minister Narendra Modi.Reuters

Prime Minister Narendra Modi will roll out three gold schemes on 5 November, including the 'India gold coin' with the Ashoka Chakra minted on it.

The other two schemes - Gold Monetisation Scheme (GMS) and Gold Sovereign Bond Scheme - are aimed at reducing the physical demand for the yellow metal in the country.

"Initially, the coins will be available in denominations of 5 and 10 grams. A 20 gram bar or bullion will also be available," PTI quoted from a finance ministry statement. 

Nearly 15,000 coins of 5 gm, 20,000 coins of 10 gm and 3,750 gold bullions will be sold through Metals and Minerals Trading Corporation of India (MMTC) outlets. 

"The Indian Gold coin is unique in many aspects and will carry advanced anti-counterfeit features and tamper proof packaging that will aid easy recycling," it said.

Gold Monetisation Scheme

Modi will also formally launch the GMS, under which the government plans to mop up gold worth nearly Rs 60 lakh crore from households and institutions in the country. Customers depositing gold with banks will get tax-free interest.

The minimum quantity of gold to be deposited under the scheme is 30 gram and there is no upper limit for deposits.

Recently, the Reserve Bank of India (RBI) allowed banks to fix interest rates for gold deposits under the GMS.

Customers can prematurely withdraw from the scheme upon completion of a minimum lock-in period by paying penalty to be fixed by the respective bank, RBI said.

However, a media report in September said that the government would impose tax on gold deposites exceeding 500 gram under the scheme if the depositors fail to name the sources.

India imports about 800 to 1,000 tonnes of gold annually and is the world's second largest consumer of the yellow metal, after China. The gold monetisation scheme is expected to help curtail the country's metal imports.

Earlier in May, Japanese brokerage Nomura had said that the success of the Modi government's proposed gold monetisation scheme depends on offering higher interest rates and waiving regulatory norms for banks.

Gold Bond Scheme

The Prime Minister will also launch the sovereign gold bond scheme, under which the RBI will issue gold bonds in various denominations.

The central bank has fixed the price of sovereign gold bonds at Rs 2,684 per gram. Applications for the bonds will be accepted from 5 to 20 November and the bonds will be issued on 26 November. The bonds will be made available through designated banks and post offices, NDTV Profit reported.

Investors will be paid a fixed rate of interest of 2.75% per annum on their initial investment. The interest will be paid half-yearly and bonds can be furnished as collaterals to obtain loans.

The bonds will be available in both demat and physical forms. The maturity period for the bonds will be 8 years, with the option to exit from fifth year.

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