The below snap shot will give a brief overview of the Gold Monetization Scheme proposed in the 2015-16 budget.
Below is the process suggested for monetizing gold
- Preliminary Test:
- In a Purity Testing Centre, a preliminary XRF machine-test will be conducted to tell the customer the approximate amount of pure gold.
- If the customer agrees, he will have to fill-up a Bank/KYC form and give his consent for melting the gold.
- If the customer does not agree to the XRF machine test, he can take his jewellery back at this stage.
- Fire Assay Test:
- After receiving the customer’s consent for melting the gold for conducting a further test of purity, at the same collection centre, the gold ornament will then be cleaned of its dirt, studs, meena etc.
- The studs will be handed-over to the customer there itself. Net weight of the jewellery will be taken after such removals and told to the customer.
- Then, right in front of the customer the jewellery will be melted and through a fire assay, its purity will be ascertained.
- These centres have viewing galleries from where the customer can see the entire process. The time taken is expected not to exceed 3-4 hours.
- Deposit of Gold:
- When the results of the fire assay are told to the customer, he has a choice of either refusing to accept, in which case he can take back the melted gold in the form of gold bars, after paying a nominal fee1 to that centre; or he may agree to deposit his gold (in which case the fee will be paid by the bank).
- If the customer agrees to deposit the gold, then he will be given a certificate by the collection centre certifying the amount and purity of the deposited gold
- Gold Savings Account:
- When the customer produces the certificate of gold deposited at the Purity Testing Centre, the bank will in turn open a ‘Gold Savings Account’ for the customer and credit the ‘quantity’ of gold into the customer’s account. Simultaneously, the Purity Verification Centre will also inform the bank about the deposit made.
- Interest payment by banks: The bank will commit to paying an interest to the customer which will be payable after 30/60 days of opening of the Gold Savings Account. The amount of interest rate to be given is proposed to be left to the banks to decide. Both principal and interest to be paid to the depositors of gold, will be ‘valued’ in gold. For example if a customer deposits 100 gms of gold and gets 1 per cent interest, then, on maturity he has a credit of 101 gms.
- Redemption: The customer will have the option of redemption either in cash or in gold, which will have to be exercised in the beginning itself (that is, at the time of making the deposit).
- Tenure: The tenure of the deposit will be minimum 1 year and with a roll out in multiples of one year. Like a fixed deposit, breaking of lockin period will be allowed.
- Tax Exemption: Transfer of Gold to the Refiners In the Gold Deposit Scheme (1999), the customers received exemption from Capital Gains Tax, Wealth tax and Income Tax. Similar tax exemptions are likely to be made available to the customers in the GMS after due examination