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RBI amends gold monetisation scheme guidelines, allows pre-mature withdrawal

22 Jan 2016 Evaluate

The Reserve Bank of India (RBI) has made a few amendments to its Master Direction on the Gold Monetisation Scheme in consultation with the government in order to make the scheme 'more customer-friendly'. RBI said that the depositors will be able to withdraw medium-term (5-7 year) and long-term government deposits (12-15 years) 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, such withdrawal will attract a penalty, in the form of a lower rate of interest for premature withdrawals depending upon the actual period for which the deposit has run. The rate of interest on deposits will be decided by government and notified by the RBI from time to time. For medium-term deposits, withdrawal between three years and five years will attract a penalty of 0.375 per cent in reduced interest rate. For withdrawal between five to seven years, the penalty will be 0.25 per cent in a reduced interest rate. For long-term deposits, the penalty between five to seven years will be 0.25 per cent; between seven to 12 years, 0.375 per cent; between 12 to 15 years, 0.25 per cent.

Further, RBI said that for medium and long-term deposits in the first year, the government will pay banks a total commission of 2.5 per cent -- 1.5 per cent as handling charges and 1 per cent as commission. Moreover, in case of large tenders of gold, the RBI said that the metal can be deposited directly with refiners wherever they have the assaying capacity and added that this will reduce the time lag between the time the raw gold is deposited and it starts bearing interest.

At present the rate of interest as notified by the government on medium term deposit is 2.25 per cent per annum and for long term deposit is 2.50 per cent per annum.


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