RBI allows banks to fix interest rates on gold deposit scheme [ Current Affairs ]

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Reserve Bank of India (RBI) has allowed banks to fix their own interest rates on gold deposits under the Gold Monetisation Scheme. In this favor RBI has issued rules mentioning Banks are free to set interest rate such as principal and interest on the deposit denominated in gold.

  • Chosen banks will accept gold deposits under the Short Term Bank Deposit (1 - 3 years), Medium (5 - 7 years) and Long term (12 - 15 years) Government Deposit Schemes.
  • The interest on the gold deposits will be credited in the accounts on the respective due dates and will be periodically withdrawable i. e. at maturity of the deposits.
  • Short term bank deposits will be applicable cash reserve ratio (CRR) and statutory liquidity ratio (SLR).
  • The raw gold should be in the form of coins, bars, jewellery excluding stones and other metals.
  • Individual banks will determine the provision for early extraction subject to a minimum lock - in period and along with the penalty.

- Published on: October 26, 2015