The scheme is aimed at mobilising idle gold held by households and institutions provide a fillip to the gems and jewellery sector and reduce reliance on import of gold over time to meet the domestic demand.
As per the draft, a person or entity can earn interest by depositing the yellow metal with banks. As per the draft guidelines, minimum gold deposit is proposed at 30 gms and the interest earned on it would be exempt from income tax as well as capital gains tax.
Banks may pay interest after 30/60 days of opening of gold savings account. Interest and principal payable to depositor is likely to be valued in gold.
The gold monetisation scheme will be initially introduced only in selected cities. "Over time, as the infrastructure for assaying and refining of gold develops, the scheme can be extended to other cities," the draft scheme said.
A person or institution holding surplus gold can get it valued from BIS-approved hallmarking centres, open a Gold Savings Account in banks for a minimum period of one year and earn interest in either cash or gold units, the draft said.
The draft paper further adds that if the customer agrees with the assessment, he will be required to fill-up a Bank/KYC form and give his consent for melting the gold. The whole process is expected to take 45 minutes. After the customer agrees, the jewellery will be melted and pure gold taken out through a fire assay process that can take up to 3-4 hours. If the customer is still not keen, he can take back the pure gold in form of bars. If the customer agrees, he will be given the certificate of deposit. The certificate can then be used to open a gold deposit with a bank. Customer will have the choice to take cash or gold on redemption, but the preference has to be stated at the time of deposit, the draft said.
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