PM Modi to launch ‘Indian gold coin’ bearing Ashok Chakra on November 5 on Diwali

New Delhi(PTI): In order to cash in on festival euphoria, Prime Minister Narendra Modi will launch the first ever ‘India gold coin’ bearing Ashok Chakra and other three gold related schemes on Thursday. The other two are Gold Monetisation Scheme (GMS) and Gold Sovereign Bond Scheme.

Narendra Modi

PM Narendra Modi will also launch the Gold Monetisation Scheme (GMS) and Gold Sovereign Bond Scheme. File Photo PTI

“Initially, the coins will be available in denominations of 5 and 10 grams. A 20 gram bar or bullion will also be available,” a Finance Ministry statement said.

About 15,000 coins of 5gm, 20,000 coins of 10 gm and 3,750 gold bullions will be made available through MMTC outlets, it said. The Indian Gold coin is unique in many aspects and will carry advanced anti-counterfeit features and tamper proof packaging that will aid easy recycling, it said. These coins will be distributed through designated and recognised MMTC outlets.

The GMS will replace the existing Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them, it said.

“Resident Indians (Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the scheme,” it said.

The minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of gold of 995 fineness, it said, adding, there is no maximum limit for deposit.

“The deposit certificates will be issued by banks in equivalence of 995 fineness of gold. The principal and interest of the deposit under the scheme will be denominated in gold,” it said.

The designated banks will accept gold deposits under the Short Term (1-3 years) Bank Deposit (STBD) as well as Medium (5-7 years) and Long (12-15 years) Term Government Deposit Schemes.

While the former will be accepted by banks on their own account, the latter will be on behalf of the government. There will be provision for premature withdrawal subject to a minimum lock-in period and penalty to be determined by individual banks. With regard to Sovereign Gold Bonds, it said, the RBI in consultation with Government, has decided to issue such instruments.

“Applications for the bond will be accepted from November 5-20. The Bonds will be issued on November 26. The Bonds will be sold through banks and designated post offices as may be notified. The borrowing through issuance of Bond will form part of market borrowing programme of Government,” it said.

The designated Post Offices are authorised to receive the applications either directly or through agents for Sovereign Gold Bond Scheme. These bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions.

The bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram and the tenor of the bonds will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates.

“Minimum permissible investment will be 2 units (i.e. 2 grams of gold). The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). A self-declaration to this effect will be obtained,” it said.

Bonds can be used as collateral for loans and the loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the RBI from time to time. Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar Card or PAN etc will be required.

The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act and the capital gains tax shall also remain same as in the case of physical gold. Bonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI and commission for distribution shall be paid at the rate of 1 per cent of the subscription amount. These bonds will be eligible for Statutory Liquidity Ratio(SLR).

With regard to Gold Monetisation Scheme, it said interest on deposits under the scheme will start accruing from the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold at the bank s designated branch.

The Short Term Bank Deposits will attract applicable Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), it said. However, the stock of gold held by the banks will count towards the general SLR requirement, it added.

The opening of Gold Deposit Accounts will be subject to the same rules with regard to customer identification as are applicable to any other deposit account. The gold deposit scheme is aimed at mobilising a part of an estimated 20,000 tonnes of idle precious metal with households and institutions.

Posted by on November 3, 2015. Filed under Economy, Nation. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.