• Reserve Bank of India has allowed central and state governments and entities owned by them to deposit gold under its Gold Monetization Scheme. Furthermore, charitable institutions have also been made eligible to deposit gold with banks to earn interest under the program.
• Besides, joint deposits of two or more eligible depositors are also allowed under the scheme and the deposit in such case shall be credited to the joint deposit account opened in the name of such depositors.

About the Gold Monetization Scheme:

• Gold Monetization Scheme was launched in 2015. The basic aim of this scheme is to monetise all the gold which is lying idle with individuals or institutions like banks.
• The key features of Gold Monetization scheme are as follows:
• The scheme is meant to mobilize gold held by domestic households and institutions. Gold collected through the scheme will be made available to jewelers for manufacturing of new jewellery and other items.
• The scheme will initially be launched at a few places because the government will have to first set-up infrastructure for facilitating easy and secure handling of gold.
• Gold collected from consumers will first be cleaned and measured at test centres; it would then be melted to test for purity. After the tests, consumers can either deposit the gold for a fee or take it back after paying a nominal fee.
• The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams.
• Those willing to deposit the gold will be given a certificate mentioning the amount and purity of the deposited gold. Banks will open a 'Gold Savings Account' on the basis of such certificates.
• Consumers will be paid interest on their gold savings account after 30/60 days of account opening. The amount of interest rate to be given is proposed to be left to the banks to decide.
• Both principal and interest will be paid to the depositors of gold, will be 'valued' in gold. For example if a customer deposits 100 gms of gold and gets 1 per cent interest, then, on maturity he has a credit of 101 gms.
• The customer will have the option of redemption either in cash or in gold, which will have to be exercised in the beginning itself (that is, at the time of making the deposit).
• The tenure of the deposit will be minimum 1 year and in multiples of one year. Like a fixed deposit, breaking of locking period will be allowed.
• Gold savings account will be exempt from capital gains tax, wealth tax and income tax.
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