Government to pay banks commission in Gold Monetization Scheme: RBI

Modifying the Gold Monetization Scheme, the Reserve Bank of India introduced a few changes to it, as per reports. The amendments are meant for depositors and banks.

Depositors will be able to withdraw medium term and long term government deposits pre-maturely after the minimum lock-in period of three years in the case of medium term deposits and after five years in the case of long term deposits. However, as the RBI announced, there would be a ‘penalty in the form of lower rate of interest.

Also, participating banks would be paid by the government, a total commission of 2.5 percent (1.5 percent handling charges and 1 percent commission) in the first year. The RBI also noted that the scheme would be up for regular reviews.

In the case of large tenders of gold, gold can be deposited directly with refiners wherever they have the assaying capacity. This is in order to reduce the time lag between the time the raw gold is deposited and it starts bearing interest.