In order to make the Gold Monetisation Scheme (GMS) more attractive, the government said on Friday that it will now allow investors to redeem the principal in gold at the time of maturity.
In order to make the Gold Monetisation Scheme (GMS) more attractive, the government said on Friday that it will now allow investors to redeem the principal in gold at the time of maturity.
“Now, for the gold deposited under Medium and Long Term government Deposits (MLTGD), the redemption of principal at maturity shall, at the option of the depositor, be either in Indian rupee equivalent of the value of deposited gold at the time of redemption or in gold,” said the finance ministry.
Recently, the administrative body of Sri Venkates-hwara temple in Tirupati, Tirmula Tirupati Devas-thanams, had requested the government to allow banks to repay gold dep-osits made for medium and long term in metal.
Temples in India have tonnes of gold offered by devotees. The Tirupati temple is crucial for this scheme as it holds seven tonnes of the metal, equivalent to about $277 million at current prices.
The ministry, however, said that if redemption of the deposit is in gold, an administrative charge at a rate of 0.2 per cent of the notional redemption amount rupee will be collected from the depositor.
“However, the interest accrued on MLTGD shall be calculated with reference to the value of gold in terms of Indian rupees at the time of deposit and will be paid only in cash,” the finance ministry explained.
