The Reserve Bank of India (RBI) has amended the gold monetisation scheme regulations relating to the eligibility criteria for making deposits. A notification says the Gold Monetisation Scheme 2015 (GMS) has been amended immediate effect.
"Persons eligible to make a deposit – resident Indians (individuals, HUFs, proprietorship and partnership firms, trusts including mutual funds/exchange-traded funds registered under the Sebi (mutual fund) regulations, companies, charitable institutions, the central government, state governments or any other entity owned by the central government or state governments) can make a deposits under the scheme," according to the notification.
The amended regulations allow joint deposits by two or more eligible depositors under the gold monetisation scheme. The deposit in such cases shall be credited to the joint deposit account in the name of the depositors.
"The existing rules regarding the joint operation of bank deposit accounts including nominations will be applicable to these gold deposits," the notification said.
This is the second set of amendments to the gold monetisation scheme regulations. The RBI tweaked regulations in June last year to make it more lucrative.
"The short term deposits shall be treated as banks' on-balance sheet liability. According to the amendments made then, these deposits can be made with the designated banks for a short period of 1-3 years (with a facility of rollover). The deposits can also be allowed for broken periods like one year and three months and two years and four months five days," the RBI notification then said.
Prime Minister Narendra Modi's government announced the Gold Monetisation Scheme in the 2014-15 financial year to provide flexibility like a savings account. Finance Minister Arun Jaitley then clarified that the scheme allowed people, who usually keep gold without much security at home or store in bank lockers by paying a maintenance fee, to make use of the real value of the yellow metal without losing it. The depositors earn interest under the Gold Monetisation Scheme as the price of the precious metal goes up.
The government declared while launching the scheme that its objective is to simultaneously safeguard the gold held in Indian households as well as put their investments into productive use. The government economists also had a larger objective to cut down the country's gold imports by limiting the domestic demand.
India is second only to China in importing gold as people see gold not just as an instrument for storing wealth. Indians have cultural reasons for buying and keeping gold which they see as an auspicious factor that brings prosperity.