The Indian government faced a public response both positive and wavering for its recently launched Sovereign Gold Bond Scheme (SGB) and its Gold Monetization Scheme (GMS), as per the Department of Economic Affairs (DEA), Ministry of Finance, reports say. The SGB received encouraging response from retail investors, with 63,000 applications worth Rs 246 crore received by banks and post offices for 917 kg of gold, as per reports.

The first tranche of SGB was issued on behalf of the Government of India by RBI across scheduled commercial banks’ branches and designated post offices, between 5th - 20th November, 2015 and received a good response, with feedback that it would continue to encourage positive response in the future.

The Gold Monetization Scheme garnered a weak response. The GMS scheme roped in 33 Collection and Purity Testing Centres (CPTCs) and 5 refiners which were notified. This culminated into a few numbers of tripartite agreements being signed among banks, CPTCs and refiners. The government is considering some amendments in the scheme and plans to spread awareness through campaigns in mass media to encourage depositors. Some amendments to the scheme include:

Allowing gold depositors to give their gold directly to the refiner without involving the collection and purity testing centres (CPTCs) where ever it is acceptable to the banks, thereby encouraging bulk depositors like HUFs and institutions to participate in the scheme;

Fees to the banks pertaining to testing, transport, refining and storage services at Collection and Purity Testing Centres (CPTCs ) and refiners for Medium and Long Term Government Deposits, to be reimbursed on actuals;

Publishing a circular clarifying that customers will gain advantage of tax exemptions on Income Tax and Capital Gains Tax;

BIS to register 55 numbers of Collection and Purity Testing Centres (CPTCs) by the end of December 2015. BIS is inviting applications from the more than 13,000 licensed jewellers who have tie-up with BIS’s licensed refiners to act as a CPTC in the scheme;

BIS has altered the licensing condition for refiners with NABL accreditation, from the previous three years to one year refining experience, thereby hoping to increase licensed refiners to nearly 20 in count.