The Union Cabinet will in the next couple of weeks take up for approval the much awaited ‘Gold monetisation scheme’ (GMS) announced in this year’s budget.

The main objective of GMS is to mobilize the gold held by households and institutions in the country and allow the depositors of gold to earn interest on their metal accounts.

The GMS is also expected to provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks.

This scheme is seen as an attempt to reduce reliance on import of gold over time to meet the domestic demand.

The Cabinet note on the GMS has been circulated among the relevant ministries, official sources said.

However, there is still no clarity as to what interest rate will be allowed under the GMS. This will most likely be discussed and decided at the level of the Cabinet, they added.

Also, the minimum quantity of gold that a customer should bring for participating in the GMS is still to be decided.

While the draft GMS provided that the minimum quantity be set at 30 grams, there are representations both for pegging the level above 30 grams and also below it.

The Finance Ministry is also working on sovereign Gold bond scheme, which is likely to be rolled out later this year.

srivats.kr@thehindu.co.in

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