Banks to get 2.5% commission under gold monetisation scheme

NEW DELHI: The government has modified the gold monetisation scheme in a bid to make it more attractive.

The finance ministry on Sunday said the government will pay banks a 2.5 per cent commission for mobilising gold under the scheme and depositors will be permitted premature withdrawal of gold.

"It is expected that modifications will make the scheme more attractive for potential depositors," said a statement announcing multiple changes.

The scheme, designed to bring out some of the estimated 20,000 tonne of domestic gold to reduce imports, has so far mobilised 900 kg of gold.

Under new rules, banks will get a few incentives for gold purity testing charges, refining, storage and transportation charges and other costs. "Effectively, banks would be getting a 2.5 per cent commission, which will include charges payable to collection and purity testing centres/refiners," the statement said.

Depositors will earn up to 2.50 per cent interest per annum on deposit and, under new rules, they will be allowed premature withdrawal. "A mediumterm deposit will be allowed to be withdrawn after three years and longterm deposit after five years. These will be subject to a reduction in the interest payable," the statement added.

Further, depositors can now give their gold directly to the refiner rather than only through collection and purity testing centres. "This will encourage the bulk depositors, including institutions, to participate in the scheme," it added. Bureau of Indian Standards has also modified licensing condition for refiners from the existing three years of refining experience to one year.