MMTC-PAMP joint venture sees gold mine in the upcoming monetisation scheme

KOLKATA: The gold monetisation scheme likely to be introduced next month to help unlock idle household collections of the precious metal has opened up new business opportunities for MMTC-PAMP India. The country’s top gold refiner, which has three gold purity verification centres, plans to add 12 such centres every year. These centres will just take 45 minutes to weigh, melt the gold, verify the purity and issue the certificate, compared with 90 days at present.

The company, a joint venture between state-run MMTC and PAMP SA of Switzerland, also aims to refine 150 tonnes of dore gold in the current fiscal.

Under the proposed gold monetisation scheme, a person will be allowed to deposit a minimum of 30 gm of gold for one year in a gold saving account. It is estimated that about 22,000 tonnes of gold is locked up in Indian households as idle assets.

“Gold monetisation scheme will definitely generate business for us. But that is not the only reason why we are setting up purity verification centres. Indians need to know the purity of gold they are purchasing and our centres will help them in this endeavour,” said Rajesh Khosla, managing director, MMTC-PAMP.

The interest rate to be decided by the banks is likely to vary between 1-2%, he said. The government is likely to exempt the interest earned on the scheme exempt from income tax. Khosla, however, said the scheme is likely to take some time before it becomes popular in India. “Such a scheme was introduced in Turkey in 2011.

But people started participating in the scheme in 2013. The scheme cannot become a success overnight. A lot of awareness has to be generated,” he said. Before depositing gold into a metal account, customers will have to get its purity checked from the testing and collection centres certified by the Bureau of Indian Standards which will provide a certificate mentioning the amount and purity of the deposited gold.

When the customer produces the certificate the bank will open a ‘gold savings account’ for the customer. Under the scheme, both principal and interest to be paid to the depositors of gold will be adjudged in terms of gold.