Banks can continue to offer short-term gold deposits based on commercial viability, the ministry said.
SEATTLE (Scrap Monster): India has discontinued parts of a scheme that encouraged households and institutions to deposit idle gold in exchange for interest payments.
The gold monetisation scheme, introduced in 2015, included gold deposits for 1-to-3 years, 5-to-7 years and 12-to-15 years.
The 5-to-7 and 12-to-15 year deposits have been discontinued, the finance ministry said late on Tuesday, citing evolving market conditions and performance of the scheme.
Banks can continue to offer short-term gold deposits based on commercial viability, the ministry said.
The move is likely to reduce the government's future obligations and minimise risks related to gold prices. While banks paid the interest on the short-term deposits, the government paid it for the medium- and long-term ones.
Prices of gold, which is seen as a hedge against geopolitical and economic uncertainties, have risen more than 15% this year, driven by escalating geopolitical tensions and uncertainties over U.S. tariff policy.
The existing gold deposits will continue until their maturity, India's finance ministry said.
The Reserve Bank of India has amended its master directions on the scheme to account for the changes.
Courtesy: www.reuters.com
Member