Swarna Bharat Yojana Gold Monetization Schemes: GMS, SGS and IGC

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PM launched Swarna Bharat Yojana (SBY) on 5th November 2015. This Yojana covers 3 gold related schemes: Gold Monetization Scheme (GMS) , Sovereign Gold Bond Scheme (SGS) & Indian Gold Coins (IGC) .

3 Gold Schemes
  • Primary purpose of SBY is to reduce dependence on imported gold, recycle unutilized gold in country & streamline gold business in country.
India is Largest Consumer of Gold in World
  • India is largest consumer of gold in world.
Indian Gold Imports 1999 - 2017

Highlights of Gold Monetization Scheme

  • Its objective is to mobilize unutilized gold from individuals, households & institutions & make them available to gold-base industries including jewellers.
  • Scheme enables individuals & institutions to deposit their gold holdings w/banks by earning interest.
  • Scheme would allow investor to deposit gold in
    • Short Term Bank Deposits (SRBD) - 1to3 years
    • Medium Term Bank Deposits (MTBD) - 5to7 years
    • Long Term Govt. Deposit (MLTGD) - 12to15 years

Benefits of Scheme

  • Earn interest for gold coins bought in past from banks/jewellers lying in locker
  • Gold will be securely maintained by bank
  • Benefit by reducing its gold import.
  • Scheme offers flexibility. Can withdraw gold as & when need it.

Facts of Scheme

  • Gold can be in any form, bullion, jewellery
  • Minimum quantity of deposits is 30 gm.
  • No maximum limit of investment under scheme.
  • Scheme allows premature withdrawal after minimum lock-in period.
  • Tenure of gold deposits is minimum of one year.
  • Joint Accounts are allowed.
  • Scheme would offer interest rate up to 2.50 % per year.

Sovereign Gold Bond Scheme

  • Purpose of scheme is to reduce demand for physical gold & to shift part of estimated 300 tons of physical bars & coins purchased every year for investment into Demat (Dematerialised) gold bonds.
  • Scheme had issued 7 tranches & 6410 kg gold is mobilised.
  • Scheme would offer interest rate up to 2.50 % per year.
  • Tenure of gold deposits is 8 year.
  • Maximum Limit of investment is 4 kg individual, 4 kg HUF & 20 kg for trusts.

Benefits of Scheme

  • Investor get stipulated interest on bonds & can get benefit if price of gold appreciates in future.
  • Bonds are highly liquid as physical gold. It can even placed as collaterals while seeking loan.
  • Buying Gold bonds eliminates need for conducting quality check.

Indian Gold Coins

  • Its purpose is to revive investment & reduce dependence on imports of gold coins.
  • India is importing about 60 tonnes of gold coins annually that are sold at premium of 8 - 10 % .
  • Gold coins bearing Ashok Chakra & Mahatma Gandhi will be minted by Security Printing & Minting Corporation of India.
  • Coins will be available in denominations of 5 gm & 10 gm.
  • They will be sold thru banks, post offices & state-run MMTC Ltd. (Metals and Minerals Trading Corporation of India) .

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