The Indian Finance Ministry officials stated that the ministry is currently delivering finishing touches to the proposed gold monetization scheme. Comments made by general public and industry participants are under consideration.
The final scheme, the draft of which was announced last month, will be launched next month or so, they added. According to sources, the Finance Ministry is in the final round of talks with the Reserve Bank of India (RBI) in order to finalize the modalities and functionalities of the scheme. However, sources close to Finance Ministry indicates that the scheme is likely to be launched in a few larger cities with easy access to BIS hallmarking facilities. Later on, it will be extended to span across the country.
Meantime, World Gold Council (WGC) suggested the need for country-wide distribution network for purity verification for successful implementation of the scheme. The gold body recommends using bank and NBFC branches for this purpose, apart from using 350 certified hallmarking centres in the country. According to WGC, banks and NBFCs must be allowed to accept gold deposits directly. The purity testing procedures followed while sanctioning gold loans must be upgraded to the standards prescribed by the scheme. WGC also urged the Ministry to envisage the use of latest technology that can test gold purity in 30 minutes, rather than having the customer wait for 5 hours to get their gold tested.
The proposed gold monetization scheme is aimed to mobilize surplus gold holdings with individuals and institutions into gold deposits. The gold thus deposited will be melted and made available to jewellers. This in turn is expected to wipe away the country’s dependence on gold imports.
Simultaneously, the Finance Ministry also plans to launch a sovereign gold bond scheme, the announcement of which is also expected along with the gold monetization plan.