The bullion industry in India has made a presentation to the top banks in the country on the proposal to open ‘ gold accounts’.
These accounts would be similar to fixed deposit account. Retail customers could open the account by depositing quantities of gold, for which they will earn interest. However, the interest will be paid not in rupees, but in gold. The scheme allows customers to deposit gold as little as 20 grams.
According to Rajesh Khosla, Managing Director, MMTC-PAMP India, the tenure of gold deposit would be three years. The interest will be calculated based on the prevailing rates. Upon maturity, the investor’s account will be credited with more gold equivalent to the amount of interest earned during the tenure. The banks can either deposit the collected gold with the Reserve Bank of India (RBI) or lend it to jewellers.
The scheme has already been formally approved by the RBI, subject to implementation of fool-proof mechanisms to determine the purity of deposited gold. According to MMTC-PAMP India, advanced software to ensure purity checks through more than 250 hallmarking centres in the country is in its final stages of development. The banks are now being asked to forward their suggestions to before the final product is delivered. The bullion industry is hopeful to launch the ‘gold account’ scheme by first quarter next year.
The scheme proposes to deter the need for procurement of physical gold which could very well eradicate the need for physical gold imports. It is also expected to mobilize the immense hoards of idle gold with Indian households and temples.
Zhejiang Yaang Pipe Industry Co., Limited