Commission to be paid to banks and procedure made simpler
GN Staff | January 25, 2016
After two months, the government has tweaked Gold Monetisation Scheme (GMS) and made it easier for the customers to participate.
“A number of suggestions have been received to make the scheme easier for the customers to participate,” the government said. Accordingly, the Reserve Bank of India (RBI) has issued revised master direction on GMS on January 21 to change the master direction of October 22, 2015.
The government will pay banks a 2.5 per cent commission for mobilising gold under the gold monetisation scheme. It will also allow the depositors a premature withdrawal of the deposited metal.
The government has already mobilised 900 kgs of gold in over two-and-a-half months time through the scheme.
The changes are:
* Premature redemption will be allowed to be withdrawn after 3 years in medium term deposits and for long term deposit it will be after 5 years. These will be subject to a reduction in the interest payable.
* Fees to be paid to banks for their services like gold purity testing charges, refining, storage and transportation charges. Effectively the banks would be getting a 2.5 % commission for the scheme.
* Gold depositors can also give their gold directly to the refiner rather than only through the Collection and purity testing centres (CPTCs). This will encourage the bulk depositors including Institutions to participate in the scheme.
* Modified the licensing condition for refiners to increase the number of licensed refiners.
* The quantity of gold collected under the scheme will be expressed up to three decimals of a gram. This will give the consumer better value for the gold deposited.
* Banks are free to hedge their positions in the case of short-term deposits.
Government has also launched the dedicated website www.finmin.nic.in/swarnabharat and toll free number 18001800000, which provide all the information of the schemes.
It is again clarified that Tax exemptions under the GMS include exemption of interest earned on the gold deposited and exemption from capital gains made through trading or at redemption. It is also reiterated that as per CBDT instructions No. 1916 dated 11th May, 1994, in course of IT Search u/s 132, gold jewellery to the extent of 500 gms per married lady, 250 gms per unmarried lady and 100 gms per male member of the family, need not be seized by tax authorities.
Indian Banks Association (IBA) will communicate the list of the BIS licensed CPTCs and refiners to the banks. To increase awareness among depositors, Government had continued the Media campaign in AIR and FM radio. Print media and Mobile SMS campaign is also being undertaken.